one step backward and one step sideways in China’s efforts to secure oil from abroad. China National Petroleum Corp., which currently has a cooperation arrangement with Russia’s state gas monopoly Gazprom, could have a role in managing Yugansk, the principal oil asset of stricken Yukos. “We do not rule out that CNPC may take part in working on this asset as well,” Russian President Vladimir Putin was quoted by Reuters.
Putin declined to identify the owners of mystery investor Baikal Finance, which made a US$9.4bn bid for Yukos. It does not own any oil wells but its principals are said to be industry veterans. Yukos said it would mount a challenge to roll back the sale on the grounds that it violated US bankruptcy law.
Meanwhile Lukoil, which assumed part of the role the embattled Yukos played supplying crude oil to China, said it would not commit to shipping oil beyond Q1 2005 if the company can make more money shipping elsewhere, Reuters also reported. “If it is five cents more profitable to ship crude to another destination we will ship it to the other destination,” Chief Executive Vagit Alekperov told reporters. The current schedule calls for shipping 400,000 tons of crude to China by rail in the first quarter, 240,000 tons in January.
Just when Sinochem Corp was getting ready to pick up the keys to South Korea’s Inchon Oil Refinery Co, creditors jumped in screaming the sale price was too low. Sinochem won control of the company on paper in September for 635.1bn won (US$602m), a tad lower than its original offer. Korea’s second largest refiner is under administration after defaulting on loans totaling 20bn won. A Korean court has given buyer and seller a month to sort out their differences.
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