Chinese state-owned oil giant Sinopec has suspended plans to invest in a $500 million petrochemical project in Russia. This came at the request of the authorities in Beijing, who fear the sanctions imposed on Moscow, Reuters reported, citing sources.
Sinopec suspended investment in the project to be implemented with the Russian company Sibur because it turned out that its minority shareholder and board member is subject to US sanctions by the oligarch Gennady Timchenko – founder and owner of the private investment group. The Volga Group, which specializes in investments in energy, transport and infrastructure assets.
The project also had funding problems, as economic restrictions likely prevented funds that were to be provided by Sberbank, which is controlled by the Russian government.
Beijing decision
China has not officially condemned the Russian invasion of Ukraine, but Beijing does not want Western sanctions to affect Chinese companies. Three state-owned energy companies, Sinopec, China National Petroleum Corp (CNPC), and China National Offshore Oil Corp (CNOOC) have set up special teams to analyze risks associated with cooperation with Russia and develop contingency plans in the event of a crude disruption. Material supplies or the implementation of further sanctions, Reuters reports.
Recently, the Chinese Foreign Ministry invited representatives of these companies to evaluate their trade relations with the Russian side and their operations in this market. The ministry has also ordered these companies to avoid ill-considered decisions regarding the acquisition of Russian assets, Reuters wrote, citing two sources.
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