Japan Threatens to Pull Out of Russia’s Sakhalin Projects

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Mitsubishi and Mitsui have stakes in the massive Sakhalin-2 project, while Marubeni and Itochu have invested in Sakhalin-1 oil project, from which Exxon Mobil is now withdrawing


Japan is considering withdrawal from energy projects jointly developed with Russia on the island of Sakhalin, the country’s trade minister said on Wednesday.

The world’s third largest economy is heavily reliant on energy from overseas and the Sakhalin projects are important for its energy security and for relations between Moscow and Tokyo.

But Koichi Hagiuda told parliament that Japanese interests would pull out  if that helps stop Russia’s aggression against Ukraine.

It was the first such statement by a Japanese government official since Moscow’s invasion sparked a US ban on Russian oil imports.

Supermajor Shell stopped buying Russian crude on Tuesday and said it would phase out its involvement in all Russian hydrocarbons from oil to liquefied natural gas (LNG) over Ukraine.

That would make Shell the first major Western oil company to abandon Russia entirely.

While Russian crude and gas has been exempt so far from Western sanctions, oil soared above $139 a barrel on Monday to its highest since July 2008 as the US and European allies began to consider banning Russian oil imports.

Shell apologised on Tuesday for buying Russian oil last week after it had said it would pull out of its Russian operations, including the Sakhalin 2 LNG plant in which it holds a 27.5% stake and which is operated by Gazprom.

Japan and Russia jointly developed several projects as part of rapprochement meant to bring them closer to signing a peace treaty after World War II.

A peace has not been concluded because of a territorial dispute over islets north of the Japanese island of Hokkaido seized by the Soviet Union at the end of the war.

Russia was Japan’s fifth-largest supplier of both LNG and thermal coal last year.

Trading houses Mitsubishi and Mitsui have stakes in the massive Sakhalin-2 project, while Marubeni and Itochu have invested in Sakhalin-1 oil project from which Exxon Mobil is now withdrawing.


  • George Russell, with Reuters



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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.