Top Stories
Russia to take Sakhalin-1 project under its control -lawmaker
Global Banking & Finance Review®
Company
MOSCOW (Reuters) -A senior Russian lawmaker said on Thursday that Moscow would take control of the Sakhalin-1 oil and gas project in which ExxonMobil, Japan’s SODECO and India’s ONGC Videsh are partners, a week after taking over the neighbouring Sakhalin-2.
MOSCOW (Reuters) -A senior Russian lawmaker said on Thursday that Moscow would take control of the Sakhalin-1 oil and gas project in which ExxonMobil, Japan’s SODECO and India’s ONGC Videsh are partners, a week after taking over the neighbouring Sakhalin-2.
Pavel Zavalny, head of the energy committee in Russia’s lower house of parliament, said the move was an obvious next step.
However, Kremlin spokesman Dmitry Peskov told reporters no decision had been taken on Sakhalin-1.
Russian President Vladimir Putin signed a decree last week seizing full control of the Sakhalin-2 gas and oil project, a move that could force out Shell and Japanese investors.
Rosneft is a partner in the Sakhalin-1 group of fields. ExxonMobil decided to pull out of the project in March after Moscow sent its forces into Ukraine.
Lawmaker Zavalny told an online briefing: “We were forced to make a decision to move Sakhalin-2 from the (production sharing agreement) regime to Russia’s jurisdiction amid sanctions… Obviously, the same will happen to Sakhalin-1.”
He added: “When sanctions are being introduced, when the companies are effectively unable to take an active part in a project, this creates various risks for us and we are forced to make such decisions.”
Earlier on Thursday, Russian Deputy Prime Minister Yury Trutnev said that oil output at Sakhalin-1 had plummeted to just 10,000 barrels per day (bpd) from 220,000 bpd due to “restrictions”, a reference to sanctions.
The Japanese government is gathering information to confirm the facts and Moscow’s intentions on the Sakhalin-1 project, an official at the industry ministry said.
Japanese trading houses Marubeni and Itochu, part of SODECO, were not immediately available for comment.
India’s Oil and Natural Gas Corp hopes that any takeover of the Sakahlin-1 project by Russia will not impact its stake in the asset, as New Delhi has strong ties with Moscow, its chairperson told Reuters.
ONGC Videsh, the overseas investment arm of state-run ONGC, has a 20% stake in the project.
Japan said in May it would phase out Russian oil imports after agreeing on a ban with other Group of Seven (G7) nations to counter Moscow’s actions in Ukraine.
Russia was Japan’s fifth-biggest supplier of crude oil in 2021, but the nation’s biggest oil refiner, Eneos Holdings Inc, has already stopped buying Russian crude while second-ranked Idemitsu Kosan Co Ltd has also said it had no plan to purchase Russian crude.
(Reporting by Reuters bureaux, Yuka Obayashi and Miho Uranaka in TokyoEditing by Jason Neely and Peter Graff)
The Sakhalin-1 project is an oil and gas development project in Russia, involving international partners like ExxonMobil, SODECO, and ONGC Videsh.
Sanctions are restrictions imposed by countries or international bodies to influence a nation's behavior, often affecting trade and investment.
Oil output refers to the amount of crude oil produced by a facility or region, typically measured in barrels per day (bpd).
Rosneft is a major Russian oil company and a partner in the Sakhalin-1 project, involved in the exploration and production of oil and gas.
Explore more articles in the Top Stories category
