Middle East

Russia finances Sakhalin energy standoff in retaliation for sanctions

Russia has blamed ExxonMobil for declining oil production on Sakhalin 1 and has charged Sakhalin 2 shareholders for a month to give back to investors in two Pacific energy projects that helped rebuild Moscow’s economy. increased pressure.

Western powers and allies, including Japan, have slapped sanctions on Russia after it sent troops to Ukraine in late February. Moscow retaliated by creating obstacles for Western corporations and their allies to leave Russia, and on rare occasions seized their assets.

The Sakhalin-1 and Sakhalin-2 offshore projects in the Russian Far East began in the 1990s, when Moscow was looking to abundant foreign investors for the funds it needed to rebuild its economy after the collapse of the Soviet Union.

On Thursday, Russia’s national energy advocate Rosneft blamed a drop in oil production on Sakhalin-1.

It said no oil tankers had left the De Kastri maritime terminal since May 6 and that Sakhalin-1 had produced little oil since mid-May. It is unclear how successful the project has been so far.

The statement followed the US energy giant’s announcement on Wednesday that it was in the process of transferring a 30% stake in the Sakhalin-1 oil and gas project to “another party,” not naming it.

“At the moment, De Kastri’s reservoir is 95% full and the oil has not been unloaded (for export),” Rosneft said, adding that there was no information about an Exxon stake sale.

Russia said last month that sanctions imposed on Moscow had cut oil production on Sakhalin-1 from 220,000 bpd to 10,000 bpd.

Sakhalin 2 Month for Investors
Separately, a Russian government decree signed on August 2 and issued late Wednesday will allow foreign investors in the Sakhalin-2 liquefied natural gas (LNG) project – Royal Dutch Shell and Japanese trading house Mitsui Bussan and Mitsubishi – gave a one month billing period. Investing in a new entity that replaces an existing project.

State gas company Gazprom will receive just over 50% of the new Russian company that will replace Sakhalin Energy, with the new company retaining the remaining 49.99% until existing Sakhalin 2 shareholders apply for a stake. The deadline is early September. .

If they fail to do so, the new organization’s shares will be valued by the government and sold to a Russian organization, according to a decree signed by President Vladimir Putin in June.

A Shell spokeswoman told Reuters: “Consistent with applicable legal requirements and project agreements, we remain committed to finding an acceptable arrangement that would allow us to exit our stake in Sakhalin Energy. ‘ said.

Mitsui & Co. and Mitsubishi Corp. reduced their stakes in the Sakhalin-2 LNG project by 217.7 billion yen ($1.62 billion) on Tuesday.

However, the Japanese government has reiterated that it wants the Japanese company to retain its stake.

Japan’s Minister of Industry Koichi Hagiuda told reporters on Thursday that “the Sakhalin-2 project is very important for the stable supply of energy to Japan, and basically we will continue to maintain stakes.” The government is investigating the details of the new organization, he said.

Mitsui & Co., Ltd., which owns a 22.5% stake in the project, and Mitsubishi Corp. separately said they were working out the details of the new organization and would work with the Japanese government and each other to do so.

Tokyo said it would support the efforts of trading companies to stay on the Sakhalin 2 project. Japan imports about 10% of its LNG from Russia, mainly from Sakhalin-2.

The successor to the project will be registered in Yuzhno-Sakhalinsk City on Sakhalin Island in the Pacific Ocean of Russia. The Sakhalin-2 LNG plant is located 60 km (37 miles) south of Yuzhno-Sakhalinsk.

(1 dollar = 134.0900 yen)

(Reuters – Reporting by Reuters; Editing by Alexander Smith, Kenneth Maxwell, David Evans, Tomasz Janowski)

https://www.oedigital.com/news/498541-russia-ups-stakes-in-sakhalin-energy-standoff-in-sanctions-retaliation Russia finances Sakhalin energy standoff in retaliation for sanctions

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