Reuters: Russia Also Wants to Nationalize Sakhalin-1 Oil Project

Russia also wants full control of the major oil and gas project Sakhalin-1, in the far east of the country. Russian President Vladimir Putin signed a decree last week giving Moscow full control of the other major gas and oil project, Sakhalin-2.

 

Pavel Zavalni, head of the energy committee in the Russian House of Commons, has said the nationalization of Sakhalin-1 would be an obvious next step, according to Reuters news agency.

Kremlin spokesman Dmitri Peskov said, however, that no decision has been made on Sakhalin-1, in which Russian state oil company Rosneft is a major partner. Sakhalin-1, which is located on the north and east sides of the Russian island of Sakhalin in the Sea of Okhotsk north of Japan, is also partly owned by a consortium of Japanese organizations, including the trading company Marubeni and the Japanese government.

The American oil group ExxonMobil, which also has an interest in the project, announced at the beginning of March that it would withdraw from Sakhalin-1. The Japanese government said it was collecting information to study Moscow’s facts and intentions regarding the project. The Japanese consortium Sakhalin Oil and Gas Development (SODECO) and Japanese trading houses Marubeni and Itochu, investors in SODECO, declined to comment.

India’s ONGC Videsh, which has a 20 percent stake in the project, hopes that any takeover of the Sakhalin-1 project by the Russian government will not affect its stake in the project. The chairman of the Indian state oil company ONGC pointed to the strong ties between India and Russia.

Shell has no interest in Sakhalin-1, but it does have an interest in the Sakhalin-2 project. Topman Ben van Beurden of the oil and gas group recently announced that he was still studying the Russian decree on the Sakhalin-2 project.

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