Saturday, February 12, 2005

India now up for a chunk of Yukos

The public prints have it that the Indian minister of oil and natural gas is off to Moscow to discuss buying into a chunk of Yukos's assets. This comes at the same time as the intrigues surrounding exactly how the Yuganskneftegaz/Rosneft deal (and the subsequent Rosneft/Gazprom deal) was financed, and specifically what the involvement of China was. A group of Chinese banks apparently put up $6 billion via a Russian bank, and now it seems that the Indian state might chip in for another $2 billion via its Oil and Natural Gas Corporation.

Two possible ways of looking at this: either you see it as India and China competing to register a claim on Russian oil production, which is quite rational, or as evidence of increasing India/Russia/China cooperation. Russian politicians have frequently said that they seek an alliance of these three states, but this has so far mostly been in evidence in terms of arms sales and military technology-transfer from Russia to China and India. (Note the Backfire lease to India, sales of Sukhoi-30+ fighters...and joint Russian/Chinese army exercises.) Russia might well see an oil carveup as improving relations with both, as well as providing alternative financing and a means of counter-leverage with them.

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