Russian Energy Diplomacy Strategy and Chinese-Russian Oil/Gas
Cooperation


In today's world, energy is not purely an economic issue. It is
rather a strategic issue of the state that is related to many
different aspects such as the safety, interests and diplomatic
strategy of various countries. Almost all countries worldwide,
big countries in particular, place energy diplomacy or oil
safety at the core position of the energy strategy. Russia, as
the only big oil/gas net exporter among the worldwide big
countries, has played energy diplomacy vividly and dramatically
in recent years and produced a widespread influence on the arena
of the world economy and politics. In the face of Russian energy
diplomatic strategy and its influence, how can China, as the
second biggest oil consumer in the world and a big energy
importer, could effectively cope with the resultant constraints,
expand its cooperation and exchange with Russia in the oil/gas
sector and ensure its own energy security and the economic safety
of the state? This is a matter worth pondering and researching.


  1  Conditions and motives for
the energy diplomacy strategy

Energy diplomacy is an important component of economic diplomacy.
"Energy diplomacy" is in short diplomacy launched around the
energy issue. Specifically, it refers to a series of diplomatic
activities conducted in energy import and export and other
energy-related matters to optimize geopolitics and national
interests. Energy diplomacy, as implemented by Russia in recent
years, has produced significant implications for energy's role
in global economic integration, the maintenance of geopolitical
influences and the creation of a favorable international
environment.
   Major reasons for Russia to have strengthened energy
diplomacy and achieved its initial results include the following
objective conditions and subjective motives.
   First of all, Russia owns an enormous oil/gas resource that
is the basis for the implementation of its energy diplomacy
strategy. The proven oil reserves today account for around 6%
of the world total. Oil reserves are mainly concentrated in West
Siberia, the Urals and the northern region of European Russia.
The proven gas reserves are as high as 48 trillion m3 - the
world's largest and one third of the world total. Owing to its
huge oil/gas reserves, energy diplomacy has become a very
effective means among the economic diplomatic measures that
Russia can take.
   Secondly, Russia has excellent geographical conditions for
the implementation of energy diplomacy. Russia stretches over
the European and Asian continents and is at the hub of the
international oil/gas connection. It owns outstanding
geographical advantages especially in pipeline connections.
Russia has two major oil/gas bases, one in the Caspian Sea region
and one in the Siberia region. Oil/gas resources in the Caspian
Sea region are mainly supplied to European countries. Oil/gas
resources in the Siberia region are mainly supplied to Asian
countries.
   Thirdly, Russia has very strong economic motives to expand
energy export. The oil/gas industry of Russia has actively used
the optimal chance of the worldwide crude oil price rise to
increase oil exports in recent years and gained lots of
Petro-Dollar. Energy export is a financial mainstay of Russia
and has become an "engine" for its economic rehabilitation.
   Finally, energy diplomacy is an effective means for Russia
to maintain its position as a major power and display its
international influence. Today, Russia is cleverly using the
advantage it finds in various countries asking it for energy
supply. It has played the "energy card" to complement diplomatic
resources with energy resources, promote the development of
various countries and improve their relationship with Russia.
Energy diplomacy has become an important resource for
safeguarding national interests and a practical factor for
maintaining national safety.


  2  Essential elements of
the energy diplomacy strategy

Russia has always been a big oil/gas producer and exporter. It
has rich experience in energy diplomacy. During a dozen years
after the disintegration of the Soviet Union, Russia has
gradually established energy-based and energy-focused foreign
policies and implemented an influential energy diplomacy
strategy on the basis of a series of internal and external
factors and in the light of world experience.

    2.1 Strategic focuses of energy diplomacy

Strategic focuses of energy diplomacy in Russia can be
summarized as "consolidate the market share in CIS, stabilize
the market share in Europe, seize the market share in the Caspian
Sea region, expand the market share in the east, penetrate the
market in North America and challenge OPEC".
   A major orientation of energy diplomacy in Russia is to
"consolidate the market share in CIS", inhibit or weaken the
claims and efforts of CIS countries in energy import
diversification and use energy supply as a strategic tool for
accelerating CIS's friendship.
   Western Europe is a traditional energy sales market for
Russia and the biggest. Russia is a big buyer of energy
production equipment and technologies from Europe. The energy
cooperation between Russia and Europe has developed in depth in
recent years. "Stabilize the market share in Europe" is
therefore a strategic focus of energy diplomacy in Russia.
   In energy diplomacy launched by Russia, "Expand the market
share in the east" mainly refers to the expansion of oil/gas
sales markets in Far East and Southeast Asia. The eastern region
of Russia has abundant oil/gas resources. With the execution of
super large fuel energy projects in the Siberia region and the
Russian Far East region, in particular, countries in Far East
and Southeast Asia (especially China and India) will become huge
consumers of Russian oil/gas.
   "Penetrate the market in North America" mainly refers to the
expansion of the North American market and especially the
development of the energy relationship with the United States.
North America is a capital source for the energy development of
Russia and also the big potential market for oil/gas sales.
   Russia has realized more and more deeply in recent years that
OPEC as a giant in the international oil market is its main
opponent in the expansion of energy diplomacy.

    2.2 Strategic measures of energy diplomacy

Russia has made efforts along multiple lines in recent years.
It has adopted a series of measures in both the macro aspect and
the micro aspect, expanded spaces for energy diplomacy and
achieved remarkable results. Its position in the international
oil/gas market has advanced rapidly.
   First, medium and long-term energy policies and related laws
and regulations have been formulated.
   Second, energy management and control exercised by the
federal government has been strengthened. The Putin Government
has taken the reform and disintegration of Yukos as the
breakthrough point, established internationally-held super
large monopolistic enterprises, regained control of the energy
industry privatized in the 1990s and avoided undue
over-penetration of private