Japan Gov't to Retain Stake in New Sakhalin-1 Operator

Kantaro Komiya and Yuka Obayashi
Tuesday, November 1, 2022

 Japan has decided to retain its stake in the new Russian operator of the Sakhalin-1 oil and gas project and has asked Japanese consortium members to stay to ensure the country's energy security, the industry minister said on Tuesday. 

"The Sakhalin-1 is extremely important for Japan's energy security as it is a valuable source outside of the Middle East," industry minister Yasutoshi Nishimura told a news conference, citing that Japan was highly dependent on Middle East crude oil.

 "Japanese government has decided to keep its stakes in the project," he said, adding he met executives of Sakhalin Oil and Gas Development Co (SODECO), a consortium of Japanese firms holding 30% stake in the formerly Exxon-led project, on Monday and urged them to consider joining the new Russian entity. 

Russian President Vladimir Putin last month issued a decree to establish a new operator for the formerly Exxon Mobil-led project, authorising the Kremlin to decide whether foreign shareholders could retain stakes in Sakhalin-1. Exxon fully exited Russia after Moscow "unilaterally terminated" its interests in the project. 



The Japan's move was expected as Nishimura has repeatedly said the project is important for the resource-poor country to diversify its procurement sources, and as Japanese companies have stayed in the Sakhalin-2 gas and oil project which is also under a new Russian operator. Japan imported about 4% of oil from Russia in 2021, but it has stopped purchasing the Russian crude since June following sanctions by Western nations on Moscow after its invasion of Ukraine. 

Japan's dependency on Middle Eastern crude has been rising year-on-year, with the September reliance reaching 95.6%. India's Oil and Natural Gas Corp, another foreign shareholder, plans to take a stake in the new Russian entity managing the Sakhalin-1 as it seeks to retain a 20% share in the asset, according to sources familiar with the matter. 

The Japanese government owns 50% stake in SODECO while the remaining stakes are held by private companies such as Itochu Corp, Marubeni Corp, Japan Petroleum Exploration Co and Inpex Corp.

(Reuters - Reporting by Kantaro Komiya and Yuka Obayashi/Editing by Chang-Ran Kim and Michael Perry)

Categories: Industry News Activity Production Asia

Related Stories

Petrovietnam, Partners Sign PSC for Block Off Vietnam

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Petronas-Eni Upstream Joint Venture to Take Up to Two Years to Set Up

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

CNOOC Sees 11% Profit Growth in 2024 Driven by Record Oil Production

CNOOC Starts Production at Two New Oil and Gas Projects

All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN

Shell Launches Next Phase of Malaysia's Deepwater Project with First Oil Production

Current News

One Shelf Drilling Rig Up for New Job in India, Other for Disposal

Four Jack-Up Drilling Rig Deals Set to Bring In $129M for Borr Drilling

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com