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22 Apr, 2022 09:27

Japan explains why it won’t quit Russian energy

An exit from joint oil and gas project would undermine Western sanctions, energy minister says
Japan explains why it won’t quit Russian energy

Japan’s industry minister warned on Friday that quitting the Sakhalin energy projects in Russia’s Far East would undermine Western sanctions and benefit Moscow.

“We are concerned that if Japan withdraws from the project and the concessions are acquired by Russia or a third country, it could further boost resource prices and benefit Russia, which will not result in effective sanctions,” Economy, Industry and Trade Minister Koichi Hagiuda told a news conference.

The Sakhalin-1 oil and gas project and Sakhalin-2, one of the biggest integrated oil and liquefied natural gas (LNG) projects in the world, located off the coast of Sakhalin Island in Russia’s Far East, comprise both offshore and onshore facilities. Sakhalin-2 is operated by a joint venture between Russia’s Gazprom (50%), UK-based Shell (27.5%), and Japan’s Mitsui (12.5%) and Mitsubishi (10%).

Hagiuda’s comments follow a report on Thursday in the British media that Shell is in talks with Chinese state-run oil companies to sell its stake in the Sakhalin-2 project amid Western sanctions against Moscow.

Several multinational energy companies including ExxonMobil, BP and Total have quit projects in Russia since February. While Japan has joined Western sanctions against Moscow, Tokyo said last week that it intends to continue to hold its concessions in Sakhalin.

For more stories on economy & finance visit RT's business section

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