Energy security: Japan looks to preserve interests in Russian oil fields

Japan wants to preserve its participation in the Sakhalin-2 oil and gas project following Russian government’s decision to establish a new project operator, Japan’s Economy, Trade and Industry Minister Koichi Hagiuda said on Thursday.

"We want to preserve our rights and interests," Japanese news agency Kyodo quoted him as saying.

On August 2, Russian Prime Minister Mikhail Mishustin signed a resolution on establishing Sakhalin Energy LLC as a new operator of the Sakhalin-2 PSA project operator with registration in Yuzhno-Sakhalinsk. Andrey Oleinikov, CEO of Sakhalin Energy subsidiary, a current project operator, will be the new operator’s top executive.

On June 30, Russian President Vladimir Putin signed a decree, under which a Russian company will become the new operator of the Sakhalin-2 project, instead of the Sakhalin Energy company. Foreign stakeholders are supposed to agree to their shares in the new company proportionally to their stakes in the former company within a month.

After a meeting with Japanese Prime Minister Fumio Kishida on July 16, Haigiuda said that Mitsui and Mitsubishi, which hold 12.5% and 10%, respectively, should preserve their presence. Kyodo said back then, citing sources, that the cabinet was in consultations with the companies. Later, the minister said that Japan had notified the United States about its plans to preserve shares in Sakhalin-2.

Tokyo has repeatedly said that it is interested in Sakhalin-2 from the point of view of its energy security. Russia accounts for 8.8% of Japan’s import of liquefied natural gas. Practically all gas comes from Sakhalin-2.