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 Forcing home the symbolism of his trip, Igor Sechin gathered media
in Tokyo the next day to warn Western governments that more
sanctions over Moscow's seizure of the Black Sea peninsula from
Ukraine would be counter-productive.
The underlying message from the head of Russia's biggest oil
company, Rosneft, was clear: If Europe and the United States isolate
Russia, Moscow will look East for new business, energy deals,
military contracts and political alliances.
The Holy Grail for Moscow is a natural gas supply deal with China
that is apparently now close after years of negotiations. If it can
be signed when Putin visits China in May, he will be able to hold it
up to show that global power has shifted eastwards and he does not
need the West.
"The worse Russia's relations are with the West, the closer Russia
will want to be to China. If China supports you, no one can say
you're isolated," said Vasily Kashin, a China expert at the Analysis
of Strategies and Technologies (CAST) think thank.
Some of the signs are encouraging for Putin. Last Saturday China
abstained in a U.N. Security Council vote on a draft resolution
declaring invalid the referendum in which Crimea went on to back
union with Russia.
Although China is nervous about referendums in restive regions of
other countries which might serve as a precedent for Tibet and
Taiwan, it has refused to criticize Moscow.
The support of Beijing is vital for Putin. Not only is China a
fellow permanent member of the U.N. Security Council with whom
Russia thinks alike, it is also the world's second biggest economy
and it opposes the spread of Western-style democracy.
Little wonder, then, that Putin thanked China for its understanding
over Ukraine in a Kremlin speech on Tuesday before signing the
treaty claiming back Crimea, 60 years after it was handed to Ukraine
by Soviet leader Nikita Khrushchev.
Chinese President Xi Jinping showed how much he values ties with
Moscow, and Putin in particular, by making Russia his first foreign
visit as China's leader last year and attending the opening of the
Winter Olympics in Sochi last month.
Many Western leaders did not go to the Games after criticism of
Russia's record on human rights. By contrast, when Putin and Xi
discussed Ukraine by telephone on March 4, the Kremlin said their
positions were "close".
A strong alliance would suit both countries as a counterbalance to
the United States.
WARM EMBRACE, BUT NO BEAR HUG
But despite the positive signs from Beijing, Putin may find China's
embrace is not quite the bear hug he would like.
There is still some wariness between Beijing and Moscow, who almost
went to war over a border dispute in the 1960s, when Russia was part
of the Communist Soviet Union.
State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic
meters (bcm) of natural gas per year to China from 2018 via the
first pipeline between the world's largest producer of conventional
gas to the largest consumer.
"May is in our plans," a Gazprom spokesman said, when asked about
the timing of an agreement.
A company source said: "It would be logical to expect the deal
during Putin's visit to China."
But the two sides are still wrangling over pricing and Russia's
cooling relations with the West could make China toughen its stance.
Russian industry sources say Beijing targets a lower price than
Europe, where Gazprom generates around half of its revenues, pays.
Upheaval at China National Petroleum Corp, at the centre of a
corruption investigation, could cause also delays, and Valery
Nesterov, an analyst with Sberbank CIB in Moscow, said China also
needs time to review its energy strategy and take into account shale
gas and liquefied natural gas (LNG).
"The bottom line is that the threat of sanctions on energy supplies
from Russia has indirectly strengthened China's position in the
negotiations," Nesterov said.
BOOSTING BUSINESS
Russia meets almost a third of Europe's gas needs and supplies to
the European Union and Turkey last year exceeded 162 bcm, a record
high.
However, China overtook Germany as Russia's biggest buyer of crude
oil this year thanks to Rosneft securing deals to boost eastward oil
supplies via the East Siberia-Pacific Ocean pipeline and another
crossing Kazakhstan.
If Russia is isolated by a new round of Western sanctions — those so
far affect only a few officials' assets abroad and have not been
aimed at companies — Russia and China could also step up cooperation
in areas apart from energy.
CAST's Kashin said the prospects of Russia delivering Sukhoi SU-35
fighter jets to China, which has been under discussion since 2010,
would grow.
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China is very interested in investing in infrastructure, energy and
commodities in Russia, and a decline in business with the West could
force Moscow to drop some of its reservations about Chinese
investment in strategic industries.
"With Western sanctions, the atmosphere could change quickly in
favor of China," said Brian Zimbler Managing Partner of Morgan Lewis
international law firm's Moscow office.
Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1
billion but Russia was still only China's seventh largest export
partner in 2013, and was not in the top 10 countries for imported
goods. The EU is Russia's biggest trade partner, accounting for
almost half of all its trade turnover. DILEMMA FOR JAPAN, SUPPORT
IN INDIA
Sechin, whose visit also included India, Vietnam and South Korea, is
a close Putin ally who worked with him in the St Petersburg city
authorities and then the Kremlin administration, before serving as a
deputy prime minister.
In Tokyo, he offered Japanese investors more cooperation in the
development of Russian oil and gas.
Rosneft already has some joint projects with companies from Japan,
the world's largest consumer of LNG, and Tokyo has been working hard
under Prime Minister Shinzo Abe to improve ties with Moscow, despite
a territorial dispute dating from World War Two.
But Japan faces a dilemma over Crimea because it is under pressure
to impose sanctions on Moscow as a member of the Group of Seven
advanced economies.
It does not recognize the referendum on Crimea's union with Russia
and has threatened to suspend talks on an investment pact and
relaxation of visa requirements as part of sanctions.
Closer ties are being driven by mutual energy interests. Russia
plans to at least double oil and gas flows to Asia in the next 20
years and Japan imports huge volumes of fossil fuel to replace lost
energy from its nuclear power industry, shut down after the 2011
Fukushima disaster.
Oil imports from Russia rose almost 45 percent in 2013 and accounted
for about 7 percent of supplies.
But if the dilemma is a tough one for Japan, it is unlikely to cause
Putin much lost sleep.
"I don't think Putin is worried much by about what is said in Japan
or even in Europe. He worries only about China," said Alexei Vlasov,
head of the Information and Analytical Center on Social and
Political Processes in the Post-Soviet Space.
Putin did take time, however, to thank one other country apart from
China for its understanding over Ukraine and Crimea — saying India
had shown "restraint and objectivity".
He also called Indian Prime Minister Manmohan Singh to discuss the
crisis on Tuesday, suggesting there is room for Russia's ties with
traditionally non-aligned India to flourish.
Although India has become the largest export market for U.S. arms,
Russia remains a key defense supplier and relations are friendly,
even if lacking a strong business and trade dimension, due to a
strategic partnership dating to the Soviet era.
Putin's moves to assert Russian control over Crimea were seen very
favorably in the Indian establishment, N. Ram, publisher of The
Hindu newspaper, told Reuters. "Russia has legitimate interests," he
added.
For Putin, the Crimea crisis offers a test case for ideas he set out
in his foreign policy strategy published two years ago as he sought
a six-year third term as president.
He said at the time he wanted stronger business ties with China to
"catch the Chinese wind in the sails of our economy". But he also
said Russia must be "part of the greater world" and added: "We do
not wish to and cannot isolate ourselves."
Two years on, he is closer to securing the first goal, but it is not
yet clear how his population feels he has done on the second.
(Additional reporting by William Mallard, Aaron Sheldrick and Linda
Sieg in Tokyo, Ben Blanchard in Beijing, Jack Frank Daniel and
Douglas Busvine in New Delhi, and Lidia Kelly in Moscow; editing by
Philippa Fletcher)
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