Chinese oil and gas company cancels $500m investment in Russia

A Chinese state-run oil and gas company has cancelled half a billion dollars of investment out of Russia to dodge sanctions.

The state-run Sinopec Group hit pause on plans to market Russian gas in China after realising that a senior figure at Russia’s Sibur was a long-term ally of Vladimir Putin.

Gennady Timchenko, an investor and board member at Sibur, had already been sanctioned by the West and is connected to other billionaires with ties to the Russian president, according to Reuters.

The move marks a hardening in China’s policy towards Russia amid the invasion, with which it has maintained regular trade amid a slew of sanctions by the West.

China has leaned towards Russia in the conflict, declining to call out its actions and endorsing its complaints about Nato’s expansion eastward.

But the Chinese government is said to be concerned about facing sanctions itself and is encouraging companies to err on the side of caution when dealing with Russia.

Since the invasion on Feb 24, China’s largest energy companies have been working to assess the impact on the billions of dollars worth of investment they have in Russia.

According to reports, officials from China’s three biggest energy companies - Sinopec, China National Petroleum Corp (CNPC) and China National Offshore Oil Corp (CNOOC) - were summoned by the Ministry of Foreign Affairs to evaluate their connections to Russia.

The energy giants were urged to handle the situation sensitively.

“Companies will rigidly follow Beijing's foreign policy in this crisis,” an executive at Sinopec told Reuters. “There's no room whatsoever for companies to take any initiatives in terms of new investment.”

The Ministry of Foreign Affairs said that China has the “right to carry out normal economic and trade cooperation in various fields with other countries across the world”.

Earlier this week Joe Biden, the US president, said that China is aware of the fact that its economic future is linked to the West.

He warned Xi Jinping that China may come to regret backing Russia in the conflict.