Press Conference by Minister Hagiuda (Excerpt)

*Note: This is a provisional translation for reference purposes only.

9:34-9:44 a.m.
Friday, July 22, 2022
Press Conference Room, METI

Question-and-Answer Session

Natural Gas Conservation

Q: What is your opinion on the emergency natural gas conservation plans including voluntary usage cuts that the EU Commission proposed to its member countries on July 20?
Also, given their assumption that Russia's supply will be entirely suspended, the European Commission has set a numerical conservation target of 15%. Within the Ministry of Economy, Trade and Industry, the Working Group for the Examination of Gas Business Systems—within the Advisory Committee for Natural Resources and Energy—also started discussing how to conserve gas on July 11, but they have not yet discussed anything as specific as numerical targets. There is growing uncertainty regarding gas supply from Sakhalin-2. Given this situation, do you think Japan will also need specific numerical targets for gas conservation moving forward?

A: First of all, I recognize that the European Commission is considering measures from the demand side to address the emerging risks involved in procuring natural gas, and these include setting numerical targets.
Japan's city gas supply and demand are not currently strained, so we are not asking citizens to conserve gas consumption at the moment. However, the committee is discussing whether we should have a request to conserve gas consumption with numerical targets prepared for a critical supply and demand situation. We will continue doing our best toward securing a stable gas supply.

Russian Oil

Q: According to the trade statistics released yesterday by the Ministry of Finance, Russian oil imports dropped to zero in June. As part of its sanctions against Russia, Japan is also planning to step up its embargo on Russian crude oil. Is the government urging oil companies to refrain from procuring it? Also, do you think that crude oil imports dropping to zero is a favorable outcome in terms of reducing Russia’s revenue for its government procurement?

A: I recognize that Russian crude oil imports dropped to zero this June, according to trade statistics.
The G7 is phasing out from dependence on Russia for energy—including crude oil—and giving each country the time it needs to secure a sustainable, alternative supply based on its circumstances.
That being said, the government is not currently urging businesses to refrain from purchasing Russian crude oil. Oil companies decide from where to procure crude oil on their own. I assume that they are refraining from purchasing Russian oil based on each company’s circumstances.
I think the whole world—not only Japan—needs to assess what effect these sanctions have on Russia. Obviously, one effect is that they are now unable to sell some of the oil they were previously able to export, but as I have said, not all countries are taking part in these sanctions. As there are still some countries buying crude oil from Russia, which may serve as a means to bypass sanctions, it is difficult to say to what degree these sanctions are directly putting pressure on Russia. 

Sakhalin-2

Q: As of next week, it will have been a month since Russia's presidential decree was signed on transferring Sakhalin-2 to a new company. Have the discussions on this progressed any further?

A: We are exchanging information closely with trading companies on the succession of rights and obligations pertaining to Sakhalin-2, but at this time, we have not yet heard that Russia has established a new company. The conditions for equity participation in this new company have not been clarified, so I will refrain from predicting what we will do next.
We will continue doing our best to ensure a stable supply of energy in cooperation with the other G7 countries.