Japan has revealed it will keep hold of its stake in the Sakhalin-1 oil and gas project in Russia, despite Western energy giants abandoning projects in the country.
Industry minister Koichi Hagiuda argued the project was key to diversifying Japan’s energy supply.
He said: “Sakhalin-1 is a valuable non-Middle East source for Japan, which depends on the Middle East for 90 per cent of its crude oil imports. There is no change in maintaining the interests of Japanese companies in it.”
Sakhalin Oil and Gas Development, a Japanese consortium, owns 30 per cent of Sakhalin-1.
Russia has banned investors from so-called unfriendly countries from selling shares in banks and key energy projects, including Sakhalin-1, until the end of the year.
This is despite firms such as Shell and BP unilaterally ditching stakes in projects situated in the country following the invasion of Ukraine.
The Kremlin has been ramping up sanctions against the West in recent weeks, after the EU, US and UK began imposing restrictions on companies, banks, oligarchs and energy supplies following the country’s invasion of Ukraine in February.
Hagiuda confirmed that Japan intended to maintain Japanese trading houses holding stakes in the Sakhalin-2 liquefied natural gas project.
Russia has given Western companies a month to claim their stakes in a new entity that will replace the existing Sakhalin-2 investment framework.
Mitsui and Co currently has a 12.5 per cent stake in Sakhalin-2, while Mitsubishi Corp has a 10 per cent holding.
Shell, meanwhile is unlikely to re-take its stake.
Japan is highly dependent on imports to meet its consumption needs – with overseas supplies making up over 90 per cent of its energy mix.