FSUOGM: Japan reportedly seeks to remain at Sakhalin-1

Japan’s government has said it intends to remain involved in the previously ExxonMobil-led Sakhalin-1 oil and gas project, Nikkei reported on October 31, in order to safeguard its energy security.

ExxonMobil until recently had a 30% interest in Sakhalin-1, but announced its intention to withdraw from the project in March following the launch of Russia’s invasion of Ukraine. Russia then set up a new entity to operate the company in October, and ExxonMobil said its stake had been expropriated. 

Japan’s economy ministry currently holds a 30% interest in Sakhalin-1’s current operator, alongside other investors Itochu, Japan Petroleum Exploration and Marubeni. The consortium has previously said it would take a final decision on whether to stay in the project in discussion with other stakeholders.

Japan’s decision to remain would go against a pledge it made with other G7 members in May to ban imports of Russian crude oil, although the timeframe for imposing the ban has not been decided. Japan relies on the Middle East for 95% of its oil imports, and it views ownership in Russian projects as key to ensuring the stability of its energy supply.

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