Mitsui to notify Russia of keeping rights and interests in Sakhalin-2 project

The Yomiuri Shimbun

12:49 JST, August 20, 2022

Mitsui & Co. plans to notify the Russian government of its intention to maintain its rights and interests as a shareholder in the Sakhalin-2 oil and gas project in the Russian Far East, it has been learned.

The trading firm is expected to notify Russia of its intention to do so by the end of this month after Mitsubishi Corp., which also holds interests in the project, makes a decision.

Mitsui holds a 12.5% stake in the current operator Sakhalin Energy Investment Co., and Mitsubishi owns a 10% stake.

The Japanese government intends to support Mitsui and Mitsubishi to retain their interests in the project.

Russian President Vladimir Putin signed a decree ordering the Sakhalin-2 project operators’ assets to be transferred to a new company established by the Russian government.

Russia announced the establishment of a new company to take over the operation on Aug. 5.

The two firms need to apply for a stake in the new entity by Sept. 4 if they intend to participate in the project, with applications to be reviewed within three days of receipt.

The two trading firms are expected to negotiate with the Russian side over the details of the contract, but it remains to be seen whether their interests will be maintained, given the impact that the invasion of Ukraine has had on Japan and Russia’s relationship.