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3 Oct, 2023 22:44

Ukraine adds Chinese energy giants to ‘war sponsors’ list

Kiev wants the West to pressure Beijing over oil and gas deals with Russia
Ukraine adds Chinese energy giants to ‘war sponsors’ list

Three major Chinese oil and gas conglomerates were added to a Ukrainian blacklist on Tuesday, after the government in Kiev accused them of helping Moscow’s war effort by having their subsidiaries in Russia pay taxes.

Ukraine’s National Agency on Corruption Prevention (NACP) announced it was adding the China National Offshore Oil Corporation (CNOOC Group), China Petrochemical Corporation (Sinopec Group), and China National Petroleum Corporation (CNPC) to the list of “international sponsors of war,” because they “continue to implement joint projects with Russia and finance Russia’s strategic industry by paying significant taxes.”

According to the NACP, Sinopec owns a 10% stake in PJSC ‘SIBUR’ Holding, which paid $347 million worth of taxes to the Russian state in the first half of 2023. It also has a 40% stake in the Amur Gas Chemical Complex LLC, which paid $30 million in taxes in 2022.

CNPC has multiple joint projects with Russia, including Yamal LNG and Arctic LNG-2, the Power of Siberia gas pipeline, and the Skovorodino-Mohe-Daqing oil pipeline, the NACP said, adding that Yamal LNG alone paid $1.14 billion in taxes to Moscow in 2022.

The Ukrainian agency described the blacklist as a “powerful reputational tool,” which in effect intimidates companies into stopping doing business with Russia by elevating their risk rating in the World Check database used by banks and insurance companies.

The government in Beijing has not yet responded to Tuesday’s action by NACP, which follows the blacklisting of the online marketplace Alibaba, telecommunications company Xiaomi, and the China State Construction Engineering Corporation.

On Monday, Ukraine removed Hungary’s OTP Bank from the list, citing unspecified promises to stop its operations in Russia. Budapest has pointed to the bank’s blacklisting as justification to hold up €500 million ($523 million) in EU military aid to Kiev since May.