Japan to keep stake in Sakhalin 1 oil and gas project

After Russia temporarily banned Western investors from selling shares in key energy projects, industry minister Koichi Hagiuda said on Monday that TOKYO Japan intends to keep a stake in the Sakhalin 1 oil and gas project in Russia.

The Minister for Economy, Trade and Industry, Haguida said that 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 to the interests of Japanese companies in it, he said.

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, stepping up pressure in a stand-off with the West.

Sakhalin Oil and Gas Development, a Japanese consortium, owns 30 per cent of Sakhalin -- 1.

An Aug. 2 Russian government decree gave foreign investors a month to claim their stakes in a new entity that will replace the existing one. Foreign investors include Mitsubishi Corp and Japanese trading houses Mitsui Co and Royal Dutch Shell.

Hagiuda reiterated that Japan intended to have the Japanese trading houses holding stakes in Sakhalin 2.

After confirmation of Russia's decision, we'll need to consider specific measures, he said.

The public and private sectors will work together to ensure a stable supply of LNG to Japan, Hagiuda said. They shared a basic policy on maintaining the stakes, and he hoped that the trading houses would start the process for converting to the new entity if they could meet Russia's conditions.

Mitsubishi Corp holds 10 percent of the market.