In the years since Russia planted its flag on the Arctic seabed in 2007, the world has been waiting for Putin to bring in outside help to produce the oil there.
That's normally a job for the supermajors like ExxonMobil and friends — but China's getting a piece of the action this time around. Russia has agreed to let China National Petroleum Corp. (CNPC) join Russia's OAO Rosneft in exploring Arctic waters for oil.
So not only are the Chinese doubling the amount of their future oil imports from Russia, but they're also getting a stake in the Arctic drilling that's about to take place.
In addition to CNPC drilling in three Arctic locations, China Development Bank Corp. will lend Rosneft approximately $2 billion. Of course, China's loan with Russia is backed by future oil production, a detail many tend to overlook.
China has been making deals like these for years.
They poured billions of dollars into Venezuela's oil industry in exchange for guaranteed supply in the future. Soon after that deal, Chavez said oil exports to China would reach as high as one million barrels per day.
And this deal goes a little deeper than merely promising to increase oil exports to China...
PDVSA, Venezuela's state-run oil company, was shipping between 300,000 and 400,000 barrels per day just to pay off the loans.
We can go back even further, too: In 2009 China shelled out $10 billion to Brazil's state-run oil company, Petrobras. The deal further stipulated that Petrobras would send Sinopec up to 200,000 barrels of oil per day during the next decade.
What's behind the Chinese scrambling to secure future oil supplies?
It all comes down to fear.