China pushing state-owned firms to buy Russian oil, gas metals assets

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• Beijing is in talks with state-owned enterprises "SOEs" regarding opportunities to scoop up Russian companies and assets, according to Bloomberg.
• The news comes on the back of European and US firms announcing exits from Russian holdings, including BP's (NYSE:BP) sale of Rosneft (OTCPK:RNFTF), Exxon's (NYSE:XOM) exit from Sakhalin, and Shell's (NYSE:SHEL) exit from a series of assets and joint ventures.
• China's foreign minister Wang Yi said earlier this week that China-Russia ties remain "rock solid."
• It was previously reported that Rosneft (OTCPK:RNFTF) was a likely bidder for BP's (BP) ~20% equity stake in the Russian producer.
• Western companies are in a difficult position, facing social and investor pressure to divest from Russia; selling assets at reduced prices to Russia does little to help investors, help Ukraine or hurt Russia; with China emerging as a likely buyer, it will be interesting to see if asset prices rise or Western companies re-think exit strategies.

Comments

[VFEA]

Current valuations for components of RSX make Warren Buffett sit up and pay attention. Mr. Buffett, keep whispering to the political class about the imprudence of politically motivated restrictions on stock markets.

For the sake of understanding current times, market valuations in December 1974 do not begin to compare to the breathtaking values we see today in Russia. Maybe, the political class has efficient access to private markets for circumventing any potentially whacky declarations made by an increasingly whacky POTUS.

Reckless US foreign policy driven by centuries-long blood feuds, weak, wrongheaded, bordering on self-destructive. VFEA views the actions by western Europe in the 90s to build bridges to ex- USSR as proper and wise. US reaction to same, childish short-sighted incompetent. Maybe, it's time for Hillary to take a well-deserved long-term vacation from manufacturing mayhem in the world.

VFEA offers prayers for the innocent suffering by the people of the world, who must absorb the effects of the thugs using her to advance their brutal agendas.

Disclosure: Long RSX, long DIG, long XLE, long AEM.

[rayfrechette]

This well illustrates the foolishness of buying from China along with our dependencies on China which were self inflicted. What would we do without Chinese meds? or India meds? we must start producing in U S A and stop this dependency on other countries that are not friendly to us. Also, if we can manufacture in U S we will save ourselves from becoming economic slaves to these unfriendly countries.

[Ernestas Petraitis]

In my opinion, even a total ban on Russian oil by the U.S. and even Europe will have only a short-term impact on prices:
In the short term, prices will freak out, and in the long term, markets will adjust and prices will fall. And why?
Demand for oil is growing slowly, but neither China nor India can significantly increase consumption of oil and oil based products (will the Chinese start driving 30% more cars or heating 30% more from one day to the next???).
Russia cannot consume its own oil and will therefore sell its oil at a discount to China and India, gradually replacing current imports from Saudi Arabia and other countries. Therefore, the oil flows in the world will change

[Crayfishkaliari]

@Ernestas Petraitis yes sanctions are relatively meaningless but they do stand to harm us... for one not oil is created equal... and two i think you are being too generous to the intent which you will all have to gauge for yourself, but its green and not the green you think... or is it

[PhiChi]

@Crayfishkaliari You have a loose screw. The sanctions have busted their economy out and it won't be recovering. Putin is down and now is the time to take him out economically. The crunch in energy prices will also cause the US and others to increase domestic production and seek alternative sources. A huge and positive long term dynamic. The East can't make it without the West's economy and financial system. If the Chinese don't honor the West's sanctions, they will suffer as well.

[Crayfishkaliari]

@PhiChi people sure want me to believe that... except its silly... but hats fine. So putin kills the green agenda and you want me to what not cheer for the end of that idiocy?

you think USA's fiat dollars is more important to russia than russias oil? OOOK chief. "Russia cant make it" make it? "without the west's paper dollars" OOOOOOOOOOK

Don't forget India and a dozen other countries... just keep believing that

[Benjamin Frost]

Russia and China must be ruined for a hundred years.

India and South Africa have also become the enemy.

[Oramokoma]

china runs indoctrination camps separating uyghur families...the most evil state on earth is china

[Crayfishkaliari]

@Oramokoma probably... unfortunately they own much of the american government so what does that make us?

[Bikeboatski]

Xi's true colors show! Unfortunately he's allied with Russia and Putin.
Do not buy Chinese.....tell your friends!

[Crayfishkaliari]

@Bikeboatski they sure are good at pointing our our hypocrisy tho

[Bikeboatski]

@Crayfishkaliari But like most they fail to see their own. We all have them, its just that some have more, or bigger, than most.

[Mktneutralhedger]

Chapeau to the Chinese: smarter than everyone else.

[jackrussels]

Reminds me of the Nazi - Russian Non-Aggression Pact of 1939. Will only last until inconvenient for one of the parties.

[Finding Your Retirement]

@jackrussels are you saying the chinese will invade the russians or the russians will invade the chinese? The nazis violated that treaty because they were desperate for land. The only land the chinese want is taiwan and the only land putin want is ukraine

[milehr]

@jackrussels You have a long memory, which does not know much:-)

[Crayfishkaliari]

@Finding Your Retirement false china has border disputes with nearly everyone it shares a border with

[vmg]

Okay, call me a conspiracy theorist, this sword has 2 edges. Yes China does need & use crude oil every day. But, in the world oil market the supply & demand ratio doesn't start or change on a dime. I expect China will buy Russian oil, mark it up and then sell this same oil to refiners that need this grade of crude. VMG- Long XOM & other energy positions

[glfunk]

Still no word from all the corporate virtue signalers on China. Guess the money is still too good for these "principled" companies stopping business with Russia. As long as the concentration camps, disappearing journalists, oppression, and violence doesn't cross their borders or trend on social media, "show me the money!".

[tomlinr1]

@glfunk You are advocating for a world wide depression. Probably not a smart way to deal with the Russia issue or the China situation.

[Crayfishkaliari]

@glfunk Lebron loves China his masters told him to

[glfunk]

@tomlinr1 no, Im calling out hypocrisy and the pathetically phony virtue signalling.

[Blue Blood]

PRC just offered to MEDIATE the RF-UKR conflict !!!! The prime qualification of a mediator is its Independence. This confirms the perverted culture of the totalitarian tyrant, sinking its materialistic teeth into every corner of the planet to grab the bottom dollar and pile more misery on weak states. The world will forbid the Recalcitrant Raider who snubbed the ICC and the Venal VIllain planning to overwhelm their victim with wayward wiles. DIplomatic Scandinavians will resist exploitation of a European tragedy by the punch- drunk Dragon, driven by greed and lust for power to create psychological division. QIA may buy the BP share of Rosneft. XOM and Shell can acquire CNOOC share in Guyana to end PRC presence in the region. The world is in a difficult position, distracted by BLM statue stunts and other sacrilege of heritage, changing names of localities to please colonial diaspora and catapulting a fast-tracked, aid-addicted minority beyond its capacity, as in Euros 2020, instead of guarding the backdoor of Europe where authoritarian armies were sharpening war weapons. Bolstered by prayers and poems, placards and pennants , songs and sermons, western unity must remain resilient to stop the killing in shattered cities and end political paralysis. Both nations, descended from Swedish tribes, are capable of mature tolerance of differences, crucial for evolution if we are not to become communist clones.

[milehr]

@Blue Blood Refill is badly needed.

[SivBum]

China is with Putin because Xi is pissed, as Putin, to be treated with no respect, losing face by recent US presidents: Obama pivot, Trump sanctions and Biden on Ukraine joining NATO policy.

India is with Putin because they have less alternative than Western Europe to buy cheaper oil from other sources. India imports 75% of their oil usage annually.

[Diesel]

I don't think Xi cares much about Putin. Xi is all about business.

[JP295]

@Diesel Agreed, China and Russia are both anti USA. So, if push came to shove Xi would tell Russia to "hit the road". However, I do not think that Putin will ever tell China to do the same.
Russia is strong but also close to being a 2nd class world power. Other than oil they do not offer much. Putin, with this war on Ukraine, may regret it. I do not know that for sure, but there is evidence. Of course, Russia has the big trump card of nuclear weapons. It would be best if Russia internally changes course. Time will tell of course.
As far as the US is concerned, I hate to say it but too many of our government leaders are horrible. As an example, I have no confidence whatsoever in Kamala. US needs to take stronger stands on many many issues (external and internal). Look at immigration ...

[Mollypik]

Smart move. Let the west sell those high value assets. I don't know ESG is just another way to say idiot.

[blasted]

It’s pretty clear the CCP could youse a slap in the face for supporting the invasion

[Crayfishkaliari]

@blasted where'd you come up with that brilliant comment, twitter?

[TheOldHand]

@blasted CCP vultures descending upon a weakened Russia to strip it of it's assets. My, that's capitalism, not solidarity among comrades.

[The Beautyful One]

By playing this hand and by weaponizing technological and financial hegemony, it will spell the end of both. Every country now realizes these critical dependencies and will either divest or diversify. China has been vindicated for banning all western financial and technology companies and for enforcing domestic alternatives.

Strategically this stupid beyond measure, and for what? A pyrrhic moral victory that will end in strategic defeat and not impacting the outcome in Ukraine whatsoever.

[polecat]

For Russia, look at debt, GDP, top 5 exports, CPI, in total, this is a third world country parading as a top county. Yes they produce oil, but where are the golden eggs of refined crude and natural gas? They have large amounts of minerals, but no real ability to mine or export said materials. ( of note the military running out of gas).
Russia fears not NATO, but the EU being next door and demonstrating how backward Russia really Is.
China can? buy up Russia, but what to get in return? Compared to Brent and WTI, their oil is a big step below, they had no real banking system, and other than arms, their industries produce nothing that the world wants. The social conditions are horrible when compared to G5 countries.
Let China buy.

[Mktneutralhedger]

@polecat fear whom? The EU? Europe gonna collapse soon. The first of the gang to die as in Morrissey's tune.

[Bikeboatski]

Additional, stronger, reasons to NOT BUY CHINA!

[gac1521]

We are witnessing the biggest mistake in geopolitical dealings since WWII. We are pushing Russia into the hands of China

Our hypocrisy is just astounding. Should have the world condemn us the US when we invaded Iraq a second time in the big, big lie they had weapons of mass destruction. 500k died or were injured. Should the US be cut off form the world!?

Putin actions versus Ukraine have to be condemn.

We should have reacted in this manner. We need real leadership in our Government. Sadly this will come in about 3 years.

[Mollypik]

@gac1521 exactly. Israel and Saudi has been armed to the teeth by the west and where are those so-righteous countries when Israel and Saudi have been bombing and killing civilians in Gaza and Yemen for decades. If you can't be consistent on your moral standard, you are just another hypocrite.

[Bikeboatski]

@gac1521 Its stupid to still be quibbling over partisan domestic politics (Iraq started by a Republican incidentally) when we should be united and concentrating on boycotting Russia AND China!
And had we not been preoccupied with the stable Genius, and all his ridiculous antics, for the last several years we might have earlier recognized Russia's (Putin's) intentions. Your man Trump couldn't even keep members of his own administration focused and working together, much less coordinate a cohesive foreign policy!

[superartus]

@Mollypik agreed

[Sid Richdale]

China will exact a heavy price from Russia for this timely bailout, they are aware of the position they are in. The alternative of selling oil on the open market will surely be more lucrative than selling to the only customer that can absorb that kind of volume.

[kiwicarrotcake]

China's dream come true.