Band Nobuhiro Kubo
TOKYO, March 8 (Reuters) – Japanese Industry Minister Koichi Hagiuda said on Tuesday that Sakhalin’s energy projects “will effectively freeze” given the exit of Western players and that Japan would therefore wait to see how the situation develops before making a decision.
Exxon Mobil XOM.N and shell SHELL announced their intention to exit the Sakhalin-1 and 2 oil and liquefied natural gas (LNG) projects in Russia, respectively, in light of Russia’s invasion of Ukraine.
Japanese trading companies Mitsui & Co 8031.T and Mitsubishi Corp. 8058.Twhich has stakes in Sakhalin-2, said the project continued to operate and had not confirmed any withdrawal plans.
The Sakhalin Oil and Gas Development (SODECO), the Japanese consortium including Itochu Corp 8001.T and Marubeni Corp. 8002.Tsays the same about the Sakhalin-1 project.
“Our main concern is whether a third country could immediately take over when we abandon our interests there,” Hagiuda told a parliamentary session. “If Russia doesn’t feel the pain of sanctions, it would be useless.”
He added that Japan was in consultation with the Group of Seven (G7) and others on this approach.
Russia, which calls its actions in Ukraine a “special operation”, is the fifth-largest supplier of LNG to resource-poor Japan and also supplies many European countries that have imposed sanctions on Moscow.
Japan has seen no impact so far on its ability to source power, Hagiuda said at a news conference earlier. Asked about Japan’s reaction to a possible US ban on Russian oil, he repeated the government’s position that Japan would act in line with G7 countries.
Sources said the United States was ready to move forward with a ban on Russian oil imports without the involvement of allies in Europe.
Regarding the supply of rare metals such as palladium and neon, Hagiuda said manufacturers have sufficient inventory and the ability to source from alternative suppliers and so far there is no impact. on production.
(Reporting by Yuka Obayashi and Nobuhiro Kubo; Writing by Sakura Murakami; Editing by Chang-Ran Kim and Michael Perry)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.