According to reports, President Vladimir Putin has signed a decree ordering the Sakhalin Energy Investment Company to a new Russian company, which will decide whether foreign stakeholders can remain.
Sakhalin Energy is the consortium behind the Sakhalin-2 oil and gas project in the Far East of Russia which has several foreign participants. According to reports, the decree said that other participants had to apply to Moscow for a new participation within a month, and those who decide not to participate may not be offered compensation.
The Russian state gas company Gazprom UK: GAZP,
which owns about 50% of Sakhalin Energy, will be allowed to maintain its stake. Shell SHEL,
owns a share of 27.5%, Mitsui 8031,
has 12.5% and Mitsubishi 8058,
The project produces about 10 million tons of liquefied natural gas a year and supplies about 4% of the current global LNG market, with Japan, South Korea and China among its main customers.
Reuters reported in May that Shell was in talks with three Indian energy companies to sell its stake in the Russian company, after earlier this year it announced it was abandoning Russian projects due to the country’s invasion of Ukraine.