US sanctions against Russia may help China

A new round of economic sanctions against Russia by the Obama administration may create a long-awaited opening for China to get into Russian oil and gas fields, a Chinese industry insider said.

"Almost overnight, Russian oil and gas giants such as Gazprom, Rosneft and Surgut began to actively communicate with us," said Zhong Weiping, general manager of Jereh Group, a leading Chinese oil and gas equipment and engineering services company.

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"Well drilling, completion sectors retain momentum, but meanwhile, their needs for our well intervention and stimulation are unexpectedly booming," Zhong said.

The Obama administration is prepared to impose deeper sanctions on Russia for its actions in Ukraine, which limit financing activities for some of Russia's biggest energy, financial and defense companies, including state-controlled oil giant OAO Rosneft, the Wall Street Journal reported.

"It is likely that American economic sanctions against Russia directly cause changes in the global oil and gas market," Zhong said.

Since the Ukrainian crisis, the US has announced three rounds of economic sanctions against Russia, including one against Igor Sechin, CEO of OAO Rosneft, who is also an ally of Russian President Vladimir Putin. It is predicted US oilfield services companies such as National Oilwell Varco and Halliburton, which has many lucrative Russian contracts, may be affected, and even banned from exporting to the market.

In response, Russia shifts its focus to new players in order to speed up its exploration and production of oil and gas reserves valued at $8.2 trillion.

According to the US Energy Information Administration, Russia produced around 10 million barrels of crude oil a day last year, making their oil reserves the world's biggest. A large amount of high-end equipment and technology is required for its shale oil exploitation in West Siberia, which will lead to a doubling of its total hydraulic fracturing horsepower by the end of 2018.