Page 10 - AsianOil Week 10 2022

AsianOil EAST ASIA AsianOil

Japan stands by

investments in

Russian oil and

gas, for now

POLICY THE Japanese government is sticking to its guns
over a decision to keep importing Russian oil
and gas, despite much of the rest of the world
imposing sanctions and working to isolate Mos-
cow following its invasion of Ukraine.
Citing the extensive number of investments
made in projects in Russia’s Far East in the past
50 years, Tokyo is determined to avoid over-re-
liance on Middle Eastern countries for fuel sup-
plies at a time when oil prices are on the rise.
Analysts in Japan have also pointed to the Octo-
ber 1973 to March 1974 oil crisis, which led to
government-ordered cuts on industry’s use of oil
and subsequent electricity supply.
Somewhat in contradiction to his desire to
keep the oil from Russia flowing, however, Jap-
anese Prime Minister Fumio Kishida has also
authorised banking sanctions on Moscow. At to be considering their stance, two Japanese Japanese firms own
the same time, he offered financial aid in excess investors in Sakhalin-1, Itochu and Marubeni, stakes in the Sakhalin-1
of $100mn to Kyiv, describing the invasion of have yet to comment on the situation. and Sakhalin-2
Ukraine as something that “we absolutely can- Mitsui alone has recently indicated that its projects.
not accept”. current investments and loan guarantees linked
Referring to his government’s decision to to the Sakhalin project amount to roughly $4bn.
keep investments in Russian government energy Last year, almost 10% of all gas and 4% of oil
infrastructure open, though, Kishida went on to imports to Japan came from Russia, and much of
say that reliable energy supply was seen as “a part this from the Sakhalin projects.
of the national interest that we have to protect to Supporting the prime minister, the chairman
Last year, almost the maximum extent possible”. of the Japan Chamber of Commerce and Indus-
Kishida went on to say that Tokyo would try, Akio Mimura, said: “I certainly don’t think
10% of all gas carefully watch how other countries respond in that Japanese companies immediately need to
and 4% of oil the days ahead as the situation in Ukraine devel- fall into line” (with Western countries). Japanese
Minister of Economy, Trade and Industry Koichi
ops, prior to committing to any further moves.
Hagiuda added that Sakhalin-1 must be consid-
Japanese investment in Russia is most promi-
imports to Japan nent in the 950-km long island of Sakhalin to the ered “an important project for our country’s sta-
came from north of the Japanese archipelago. The island was ble supply of energy”.
first colonised by the Japanese in the early 17th
The Japan Bank for International Co-opera-
Russia, and much century and is still claimed as Japanese territory tion’s (JBIC), governor, Tadashi Maeda, mean-
of this from the by some. It is now home to the Sakhalin-1 and while offered a cautionary albeit vague “we can’t
Sakhalin-2 oil and gas projects.
just go ahead with business as usual”. The JBIC
Sakhalin-1 currently produces around is a major lender connected to energy projects
Sakhalin projects. 220,000 barrels per day (bpd) of oil, according to in Russia.
Japan’s Ministry of Economy, Trade, and Indus- According to local media in Japan, however,
try (METI), with Sakhalin -2 producing both oil a growing number of industry officials is now
and gas, the bulk of which is shipped to Japan starting to question the government’s stance.
as LNG. Unnamed executives in the financial and auto-
A Japanese government-led group owns 30% motive sectors in particular have argued that the
of Sakhalin-1, while Japanese firms Mitsubishi hit to Japan’s global business reputation should
and Mitsui & Co. own a combined 22.5% of the be considered more important than the gov-
Sakhalin-2 facility. ernment’s investments in a country being con-
While Mitsubishi and Mitsui are now thought demned worldwide for invading its neighbour.™

P10 www. NEWSBASE .com Week 10 11•March•2022