Putin orders Sakhalin Energy to become new Russian company

President Vladimir Putin has signed a decree ordering the Sakhalin Energy Investment CompanySakhalin Energy Investment Company to be a new Russian company, which will decide if foreign stakeholders can remain.

Sakhalin Energy is the consortium behind the Sakhalin 2 oil and gas project in Russia's far east. It has several foreign participants. Other participants must ask Moscow for a new stake within a month, and those who decide not to take part may not be offered compensation.

Russia's state-owned gas company Gazprom RU: GAZP, which owns about 50% of Sakhalin Energy, will be allowed to keep its stake. Shell SHEL holds a 27.5% stake, Mitsui 8031 holds 12.5% and Mitsubishi 8058 holds 10%. The project produces around 10 million tons of liquified natural gas a year and supplies about 4% of the world's current LNG market, with Japan, South Korea and China among its main customers. In May, Reuters reported that Shell was in talks with three Indian energy companies to sell its stake in the Russian company after it announced earlier this year it was exiting Russian projects over the country's invasion of Ukraine. In May of this year, Shell announced a charge of $3.9 billion over its exit from Russia.