TOKYO (Jiji Press) — A new company was set up in Russia Friday to take over operations at the Sakhalin-2 oil and natural gas development project.
Trading houses Mitsui & Co. and Mitsubishi Corp., both of which have stakes in the project in the Russian Far East, need to decide within a month of the new company’s establishment whether they will agree to investments decided according to their stakes.
The new company, set up in Yuzhno-Sakhalinsk on the island of Sakhalin, is headed by the chief of Sakhalin Energy Investment Co., the new company’s predecessor.
The two Japanese firms will be able to retain their interests in the project if they accept the new company’s investment conditions and have their applications approved by the Russian government.
If Moscow rejects their applications, the new company’s shares will be sold to Russian companies.
Mitsui holds a 12.5% stake in Sakhalin Energy, while Mitsubishi owns 10%. British oil giant Shell PLC, which had a 27.5% stake in the project, decided to pull the plug following Russia’s invasion of Ukraine.
Sale of Sakhlian-1 stakes banned
Meanwhile, Russian President Vladimir Putin signed a decree Friday to ban companies in Japan and other unfriendly countries to sell stakes in the Sakhlian-1 oil and natural gas development project until Dec. 31, Russia’s state-run ITAR-Tass news agency said.
Sakhalin Oil and Gas Development Co., a Tokyo-based company jointly held mainly by the Japanese government, trading houses Itochu Corp. and Marubeni Corp., and Japan Petroleum Exploration Co., has a 30% stake in the project.
In March, U.S. oil giant Exxon Mobil Corp. announced its withdrawal from the project in response to Russia’s invasion of Ukraine.
Putin’s decision is apparently designed to stop the exodus of Western energy companies from Russia following its invasion of Ukraine.