https://www.reuters.com/business/energy/rus...res-2022-07-01/
Russia tightens control of Sakhalin-2, raises stakes in economic tit-for-tat
By Yuka Obayashi
and Emily Chow
TOKYO, July 1 (Reuters) - President Vladimir Putin signed a decree on Thursday to take charge of the Sakhalin-2 gas and oil project in Russia's far east, a move that could force Shell and Japan’s Mitsui and Mitsubishi to abandon their investments as the economic tit-for-tat over Ukraine deepens.
The decree said the new firm would take over all rights and obligations of Sakhalin Energy Investment Co, in which the two Japanese trading companies and Shell Plc (SHEL.L) hold just under a 50% stake. read more
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The five-page decree, which comes amid Western sanctions on Moscow over the invasion of Ukraine, indicates that it is up to the Kremlin to decide whether foreign shareholders are to remain in the consortium.
Shell made clear its intention to quit the project months ago and has been in talks with potential buyers. But Japan has previously said it would not give up its interests in the Sakhalin-2 project, which is important for its energy security, even if asked to leave.
Shares in Mitsui & Co (8031.T) and Mitsubishi Corp (8058.T) fell 6% in trading on Friday on concerns over impairment losses. They underperformed broader Nikkei index (.N225), which dropped 1.9%.
A Mitsubishi spokesperson said the company was discussing with its partners in Sakhalin Energy and the Japanese government on how to respond to Putin's decree. Mitsui did not offer make any immediate comment.
Russia tightens control of Sakhalin-2, raises stakes in economic tit-for-tat
By Yuka Obayashi
and Emily Chow
TOKYO, July 1 (Reuters) - President Vladimir Putin signed a decree on Thursday to take charge of the Sakhalin-2 gas and oil project in Russia's far east, a move that could force Shell and Japan’s Mitsui and Mitsubishi to abandon their investments as the economic tit-for-tat over Ukraine deepens.
The decree said the new firm would take over all rights and obligations of Sakhalin Energy Investment Co, in which the two Japanese trading companies and Shell Plc (SHEL.L) hold just under a 50% stake. read more
Advertisement · Scroll to continue
The five-page decree, which comes amid Western sanctions on Moscow over the invasion of Ukraine, indicates that it is up to the Kremlin to decide whether foreign shareholders are to remain in the consortium.
Shell made clear its intention to quit the project months ago and has been in talks with potential buyers. But Japan has previously said it would not give up its interests in the Sakhalin-2 project, which is important for its energy security, even if asked to leave.
Shares in Mitsui & Co (8031.T) and Mitsubishi Corp (8058.T) fell 6% in trading on Friday on concerns over impairment losses. They underperformed broader Nikkei index (.N225), which dropped 1.9%.
A Mitsubishi spokesperson said the company was discussing with its partners in Sakhalin Energy and the Japanese government on how to respond to Putin's decree. Mitsui did not offer make any immediate comment.