Study On The Combination Of Production And Financing Of Sino - Russian Oil And Gas Industry

Energy cooperation between China and Russia has long been a vital field in economic cooperation between the two countries. Substantial achievements in energy cooperation have been made in recent years, especially in oil and natural gas, and the cooperation has been increasingly strengthened. Currently energy cooperation between China and Russia is characterized with the following features: trade in curde oil as basis, fund as connecting ties, government treaties as promoting force; national oil companies as medium, and national credit as guarantee. As industry financialization becomes a developing tendency in gas and oil industries, how to take advantages of the financial potential to promote industry and of the role played by financial tools in distributing energy are surely essential in cooperation among the enterprises of both countries,since the methods mentioned above will contribute to the working efficiency and abundant financial sources for multi-national enterprises in international cooperation. In this regards,constructing the mode of how to combine the industries and finance becomes an important problem. The dissertation, taking international industrial division and combination of industry and finance as coordinate, and oil and gas as an example, conducts a thorough research on the modes of combination of industry and finance in energy cooperation between China and Russia.Based on the theory of industrial division, this dissertation illustrates the unreasonable parts and developing trends in the industrial structure of international oil market, and good opportunities for deep cooperation in oil and gas industries between the two countries brought by global industrial division. No matter the division is vertical or horizontal, industry development brings deepen connections among various industries, which will further require a perfect industry and products structure in curde oil and oil products; meanwhile, it requires a upgrading and optimization in these industries, promotes the quality of products, and realizes more detailed division of market and products. However, a painful situation existing in current international oil market is that the manufacturing techniques and processing capacities of curde oil lag behind. In other words, it means the techniques and capacities can’t meet the demand of development in relevant industries.On the other hand, the strengthening of financial feature of oil makes researchers both home and abroad broaden their research in the field of industrial finance, and fundamentally they analyz the problems in international oil market from the perspective of industrial finance. This dissertation, after summarizing the theories of industrial division, combination of industry and finance and industrial finance, hold that industrial finance gains its development on the basis of theory of combination of industry and finance, and it is the purification and refinement of the practice of combination of industry and finance, since the two theories share a common source.The hidden reason of boom and slump of international oil price has been analyzed in this dissertation. The futures market breaks away from the entity selling makes the oil price bubble more serious; the absolute control of curb trading over over-the-counter trading causes the international oil pricing system to be more unreasonable; the trading participants represented by international investment banks and major hedge funds, together with the frequent abuse of trading systems, constitutes the major reason of the abrupt rise and fall of international oil price. Although the international oil market is experiencing a transformation of power system in which the “new seven sisters” represented by national oil corporations confront equally with major multi-national oil giants in European countries and America. However, it is inevitable that the major multi-national oil giants still possess the power to control the oil resources throughout the world;besides, being familiar with the operating mechanism in international capital market, they manage to control the pricing mechanism of international oil market with skilled techniques of capital operating. They even gain their investment profits through seemingly fair valuation adjustment mechanism, which seems impossible or incapable for the emerging economies represented by China. Various financial events vividly reveal the wealth effect due to further combination of oil industry and financial capital, as well as the driving of financial mechanism. Strangely enough,China and Russia, as two important importing and exporting countries in international energy market, have long been excluded in this system, and it is emergent for the two countries to refine and strengthen the combination of industry and finance. Through the analysis above, this dissertation points out the huge gap between large energy corporations in China and those multi-national energy giants in cross-country business.The dissertation shows that differences among oil products becomes more detailed due to the development in techniques, division and productivity forces, and these detailed differences serve as the basis for the development of oil futures market. The variety of oil futures treaty depends on product differences and product segment. The dissertation holds that superficially the abrupt changes in international oil price is caused by the unbalance between provide and supply, yet actually it is caused by the market in which the improvement of techniques and processing techniques are comprehensively reflected during the whole process from oil and gas exploration to refinement. With regards to the current quality of oil products in the world market, light crude oil with low sulphur takes a relatively low percentage, while medium crude oil and heavy crude oil take a high percentage, and various oil products are transferred to a variety of investment products by finance market which then becomes investment objects for investors. It is well-known that capital is driven by profits, then the international oil market can easily develop into an oil finance market when different international investment banks, hedge funds as well as huge personal capitals are poured into the market; under this situation, different oil product with a corresponding futures treaty becomes a investment object.The structure of this dissertation is as follows:Firstly, a summery of certain theories is made. Theories of international industrial division and the combination of industry and finance serve as theoretical basis for this dissertation. While summarizing the combination of industry and finance theory, this dissertation asserts that it is developing into theory of industrial finance; at the same time, energy finance theory and its branch oil finance theory are summarized.Secondly, in Chapter Three and Chapter Four, research is conducted on the pattern of world oil market since the 21 st century, and the status of China and Russia in current world oil market is analyzed from perspectives of energy security, substantial rise and fall of oil price, the replacement of world oil giants, and the abrupt rise of national energy corporations, ect.In Chapter Five, the dissertation points out that the intensive and extensive development of international industrial division is the inner mechanism of further cooperation between China and Russia, of which is based on a research of the “Going-out” strategy taken by China’s gas and oil enterprises, and the current situation and new achievement of cooperation among gas and oil enterprises both in China and Russia after entering the 21 st century.In Chapter Six, the major problems existing in finance market of Russia are pointed out after considering the current situation of its market, and on the basis of often-used patterns of raising funds in gas and oil enterprises and related projects, the author proposes the combination of industry and finance within the oil and gas industries in China and Russia, with an emphasis on the analysis of raising funds in gas and oil projects. At the same time, the author proposed that investment banks should gain rapid development, and its potentials to support the “Going-out”strategy of China’s large gas and oil enterprises, and this becomes one of the main contents of China’s financial reform. Then the dissertation concludes that the realistic and practical means of cooperation among energy enterprises in China and Russia is through further promotion of the combination between industrial capital and financial capital, construction of transnational flow system of industrial capital and financial capital, and exploration of feasible patterns of industry and finance fusion with multi-national enterprises as medium.In Chapter Seven and Chapter Eight, the author analyzes the security of national credit in energy cooperation between China and Russia as well as the major risks in industry and finance combination, and finally some corresponding strategies in dealing with those risks are proposed.