Japan retains stake in Russia’s Sakhalin 1 oil project

Japan has retained its stake in the Sakhalin 1 oil and gas project in eastern Russia, with a Japanese company taking a 30 percent stake in a new Russian operator, TASS news agency reported on Monday.

The report, citing the Russian government, comes as resource-starved Japan seeks to retain its stake in the project to preserve a vital source of energy, while joining Western sanctions over Russia’s invasion of Ukraine.

Russia has authorized Japanese trading companies Mitsui & Co. and Mitsubishi Corporation to invest in a similar energy project, Sakhalin 2, on the northern Japanese island of Sakhalin.

The Japanese government and companies, including major trading companies Itochu and Marubeni, have invested in Sakhalin1 through the Sakhalin Oil and Gas Development Company. The Tokyo-based company holds a 30 percent stake in the project.

Sakhalin 1 began producing crude oil on Sakhalin in 2005. According to a decree signed by President Vladimir Putin, foreign business partners have a month to decide whether to invest in the new company within a month of the launch of the new operator in October.

Sakhalin Oil and Gas Development decided to invest in the new operator at its Nov. 4 shareholder meeting.

ExxonMobil’s major Sakhalin 1 stakeholder, the U.S. oil company, announced in March that it was pulling out of the project.

© Kyodo News

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