Japan intends to keep a stake in Russia’s Sakhalin-1 oil and gas project, Japanese Industry Minister Koichi Hagiuda said on Monday, after Moscow temporarily banned Western investors from selling shares in key energy projects.
The project helps diversify Japan’s energy supply, Hagiuda told a news conference.
“Sakhalin-1 is a valuable non-Middle Eastern energy source for Japan, which relies on the Middle East for 90% of its crude oil imports,” said Hagiuda, Minister of Economy, Trade and Industry.
“There is no change in keeping Japanese business interests in it,” he said.
Russia has barred investors from so-called “unfriendly countries” from selling shares in banks and key energy projects, including Sakhalin-1, until the end of the year, intensifying pressure in a sanctions standoff with the West.
Sakhalin Oil and Gas Development, a Japanese consortium, owns 30% of Sakhalin-1.
Separately, a Russian government decree dated August 2 gave foreign investors in the Sakhalin-2 liquefied natural gas (LNG) project one month to claim their stakes in a new entity that will replace the existing one. Foreign investors include Royal Dutch Shell and Japanese companies Mitsui & Co and Mitsubishi Corp.
Hagiuda reiterated that Japan intends for Japanese firms to hold stakes in Sakhalin-2.
“We will have to consider specific measures after confirming the details of Russia’s decision,” he said.
“The public and private sectors will work together to ensure a stable supply of LNG to Japan,” Hagiuda said. They share a basic policy on holding holdings and expect companies to start the conversion procedure to the new entity if they can meet Russia’s conditions.
Mitsui & Co has a 12.5% stake in Sakhalin-2. Mitsubishi Corp owns 10%.
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