Monday, October 20, 2014

The 4th Media » Banned from US Banks, Gazprom Turns To Even Bigger Banks In China

Russian state owned oil company Gazprom is turning to China for foreign sources of capital now that the U.S. and European financial markets are closed to them.

Gazprom said in a press release posted on its website today that it was in talks with the behemoth Industrial and Commercial Bank of China for funding. The statement did not say whether funding would be provided, however.

This has been quite the week for China-Russia relations. Li Keqiang was in Russia earlier this week to discuss deeper economic integration. Energy remains front and center. But integration is occurring beyond oil and gas deals. For instance, the Bank of Russia announced a deal with the Moscow Exchange to trade currencies and create forex derivatives contracts between the two markets.

Russia is aching to settle business in Chinese yuan, partly in a snub to the Western powers, and partly out of necessity because of Western sanctions.

Last week, BNP Paribas said it was no longer offering letters of credit to sanctioned Russian banks dealing with commodities traders. BNP Paribas has run afoul of European Union sanction law in the past, and was fined heavily for it.

Both the U.S. and European Union banned its banks from providing Russian companies with financing beyond 90 days.

Like all modern companies, reliable credit lines are imperative to running a business. Russian banks can only handle so much.

Complete story at - The 4th Media » Banned from US Banks, Gazprom Turns To Even Bigger Banks In China

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