The shale revolution and Sino-Russian energy cooperation

With the progress of technology, the production cost of shale oil and gas will decrease again, and, in turn, the competitive advantage of shale oil and gas over conventional oil and gas exploitation will be enhanced. Obviously, this will lead to changes in the international oil and gas energy pattern. The paper discusses the impact of the shale revolution on the international energy market, and analyses the trends in Sino-Russian energy cooperation. Methodologically, the paper relies on a center of gravity theory as applied to oil and gas production and consumption. The main research method is comparative analysis of energy exports and imports between China and Russia under the development of technologies for shale oil and gas production. The impact of the shale revolution on China is increased number of channels of oil and gas import, increased exploitation of oil and gas resources, reduction in China’s energy imports, and the country’s stronger voice in the energy market. The impact on Russia is added competitive pressure in the energy market, and increased stimulus to exploitation of unconventional energy in Russia. The paper outlines prospects for Sino-Russian cooperation in oil and gas export and import given the emerging structure of the market, and lists obstacles in the way to successful cooperation between the countries.