The Business: Kremlin vows to underwrite China’s huge Yukos contract
“The state-owned gas company PertoChina struck out at Moscow in retaliation at the start of August by cancelling a $5.6bn (£3bn,€4.6bn) contract with Russia’s natural gas giant Gazprom, Shell and Exxon-Mobil to build the longest gas pipeline in the country from newly discovered gas fields in western China to Shanghai.”
5 Sept 2004
By Ben Aris
IN Moscow
RUSSIAN Prime Minister Mikhail Fradkov last week attempted to smooth over growing tensions with China by promising that the Russian government would honour oil contracts made by Yukos.
The giant oil company is facing bankruptcy at the hands of the Kremlin.
“There are no reasons for any emergency,” Fradkov said. “Oil products will keep going to China the way they have been.”
Portfolio investors may have been badly burnt by the Yukos affair, but China is facing a energy crisis if its long-term supply contracts with Yukos are not honoured.