/JAPAN: Sakhalin-2 Operator Replaced As Russia Tightens Rules On Access To Oil & Gas Sector

Russian President Vladimir Putin has signed off on a decree transferring the rights to the Sakhalin-2 oil and gas project to a newly formed Russian company, seemingly in retaliation for sanctions imposed by "unfriendly nations," Japanese and Russian media outlets report.

• The decree states that Gazprom will retain its 50% stake in the operator, but all other stakeholders have one month to declare if they will take stakes in the new company. Non-Russian shareholders include Japan's Mitsui (12.5%) and Mizuho (10%).
• If their applications are rejected by the Russian government, unallocated shares will be sold within the next four months. Moreover, funds from share sales will not be automatically transferred to previous stakeholders.
• "The presidential decree also establishes that only Russian law should apply to the new LLC for Sakhalin-2, and specifies that disputes over the implementation of the project can be resolved in the Moscow Arbitration Court," Vedomosti reports.
• The decree follows the adoption of legislative amendments by the Russian parliament that prevent foreign entities from directly holding exploration and development licenses for oil and gas blocks.
• Japan swiftly joined Western sanctions over Russia's invasion of Ukraine, but repeatedly said it was not planning to abandon the Sakhalin-2 project. Today Tokyo said it was trying to confirm reports on measures taken by Russia with regards to the project.