TOKYO: A Japanese consortium has decided to retain its stake in the new Russian operator of the Sakhalin-1 oil and gas project and is set to notify Moscow, moving to secure stable energy supplies for resource-scarce Japan.
“It’s an extremely important project,” Economy and Industry Minister Yasutoshi Nishimura said on Friday (Nov 4) in welcoming the unanimous decision by the shareholders in Sakhalin Oil and Gas Development, or SODECO, a consortium of Japanese companies holding a 30 per cent stake in Sakhalin-1 in Russia’s Far East.
Nishimura said that SODECO was expected to notify the Russian operator of its decision by Nov 11, meeting a deadline set by Russia. The government will do its utmost to ensure Japan’s energy security by working closely with the private sector, he said.
The decision by SODECO shareholders on Friday came days after Nishimura met with consortium executives asking them to keep their stake in the Russian project.
Japan’s government owns a 50 per cent stake in SODECO. The remainder is held by private companies including major trading giants Itochu and Marubeni, and energy companies Inpex and Japan Petroleum Exploration.
Many major Western energy companies have withdrawn from projects in Russia due to the war in Ukraine. Japanese officials maintain that oil and gas from Sakhalin is vital for the country’s energy security.
Russian President Vladimir Putin in October unilaterally announced a plan to establish a new operator for the project previously led by Exxon-Mobil, which left the project after Moscow terminated the company’s interests in the project.
Japanese companies Mitsubishi and Mitsui & Co have chosen to keep their stakes in Sakhalin-2, another oil and gas project under a new Russian operator.
Japan imported about 4 per cent of its oil from Russia last year before suspending its purchases after sanctions were imposed on Moscow for its invasion of Ukraine. Japan has since increased crude imports from Middle East.