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Japanese government urges companies to hold stakes in Russia’s Sakhalin projects
INVESTMENT
THE Japanese government has urged domestic companies to hold on to their stakes in Russia’s Sakhalin oil and gas projects following steps taken by Mitsui & Co. and Mitsubishi to reduce their shareholdings in the Sakhalin-2 LNG pro- ject earlier this month.
Japanese Minister of Industry Koichi Hagi- uda announced that he had met top executives from Mitsui and Mitsubishi to discuss their future participation in the project.
Russian President Vladimir Putin decided in June to place the entire consortium operating the Sakhalin-2 oil and gas project – Sakhalin Energy Investment – under Russian ownership. Shell is reported to be seeking to sell its 25% plus one share stake in the project and the two Japanese firms have reduced their 12.5% and 10% respec- tive stakes in the new Gazprom-controlled com- pany by a combined total value of JPY217.7bn ($1.66bn).
The foreign partners in Sakhalin-2 LNG have until early September to claim stakes in the new company. Russia has also told all buyers of Sakhalin-2 LNG to make future payments to the European branch of a Russian bank, but details have yet to be released. Moscow is also prohibit- ing foreign investors from selling their shares in energy projects or banks until the end of the year in response to international sanctions imposed
following Russia’s invasion of Ukraine.
Hagiuda told reporters that Japan would urge domestic firms to keep shareholdings in the pro- ject, but added that the government would “con- sider specific measures after confirming details
of Russia’s decision”.
Hagiuda urged Mitsui and Mitsubishi to
“think positively” about their future participa- tion in Sakhalin.
“The public and private sectors will work together to protect the interests of Japanese companies and ensure a stable supply of LNG,” the minister said, adding that Sakhalin LNG was key to stabilising energy supply to the country.
Sakhalin supplies Japan with about 10% of its annual LNG imports.
The minister said Japanese investors in the Sakhalin-1 oil project would keep their inter- ests in it. A consortium of Japanese companies – Sakhalin Oil and Gas Development – holds a 30% stake in Sakhalin-1.
The project contributes to diversifying the country’s energy supply, Hagiuda said. “Sakha- lin-1 is a valuable non-Middle East source for Japan, which depends on the Middle East for 90% of its crude oil imports. There is no change in maintaining the interests of Japanese compa- nies in it,” he said.™
The foreign
partners in Sakhalin-2 LNG have until early September to claim stakes in the new company.
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