TODAY: Russia and China sign 40 agreements, secure mutual favours; Kremlin to create state oil-drilling giant; Rosneft hires London firm to fight sanctions in European courts; Siluanov calculates worst-case scenario; Fedotov speaks up for Memorial; Australian PM’s comment creates tensions; Ukraine and Russia not seeing eye-to-eye on energy payments.

Russia and China signed 40 agreements yesterday across the energy, finance, and technology sectors – most significantly, China agreed to provide $4.5 billion worth of credit lines to Russian banks; a separate memorandum takes the pair closer to their $25 billion high-speed rail project.  The deals will help Russia to weather itself against Western sanctions, and helps China further its plans to promote international usage of the yuan.  A giant, state-owned oil drilling corporation, uniting all the necessary expertise, has been approved by President Vladimir Putin for creation; the company will replace foreign oil service companies that have been banned from working in Russia by Western sanctions.  Meanwhile, Rosneft has hired a London-based law firm to work on a legal strategy to fight sanctions in European courts.  Finance Minister Anton Siluanov says that if the ruble and the price of oil do not recover, Russia will have $12.5 billion worth of holes in its federal budget next year.  The ruble still shows no signs of recovery.  In a piece examining the ideologies of the Kremlin’s inner circle, Mikhail Khodorkovsky likens Dmitry Kiselev, the head of state news network Russia Today, to ‘Dr. Strangelove’.