OREANDA-NEWS. August 08, 2014. Chinese oilfield equipment makers are increasing their focus on the Russian market, with some already reporting a rise in enquiries and business as they manoeuvre to take advantage of American and European threats to restrict the flow of oil and gas technology and knowledge to Moscow.

The United States and EU have been levelling sanctions against Russian individuals and companies for several months in response to the conflict in Ukraine. This month, the White House introduced harsher measures that will affect Russia’s largest energy companies – Rosneft and Novatek – while Brussels will consider its strongest punishment yet.

Western sanctions have already proved a boon for China’s oilfield equipment manufacturers, which have become more competitive in recent years by offering products and services at lower prices than their more established rivals.

“The US sanctions on Russia have helped to improve our communication with Russian companies,” Yao Renqi, deputy marketing manager for Yantai Jereh Oilfield Services Group, told Interfax. Based in Shandong in east China, Jereh has around half the market share for shale gas equipment in China.

“Many Russian oil and gas companies are actively talking with us about equipment procurement, such as drilling rigs, which is something we haven’t experienced before,” said Yao. Among the companies speaking to Jereh are Gazprom, Rosneft and Surgutneftegaz – according to Yao.

Jereh’s expansion into Russia is well underway. “We are establishing a large after-sales service network in Russia and a spare parts store as well by cooperating with a Russia-based company,” Zhong Weiping, general manager of Russia and CIS marketing, said at an exhibition in Moscow last month.

Russia is the fourth-largest destination by value for Chinese exports of oil and gas drilling parts – behind the US, Singapore and Kazakhstan – according to Chinese customs data. China exported \\$49.66 million-worth of parts to Russia in the first five months of 2014.