Press Conference by Minister Hagiuda (Excerpt)

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

10:27-10:33 a.m.
Monday, August 8, 2022
Press Conference Room, METI Main Building

Question-and-Answer Session

Sakhalin-2 

Q: I have a question about Sakhalin-2.
Last Friday, August 5, a new company was established to take over the Sakhalin-2 business. Please tell us if there are any updates to the situation you know about, such as the conditions presented by Russia at this point.
In addition, if Japanese companies are investing in the new company, they will need to notify the Russian side within one month. Is there anything you can tell us about the future direction that has been decided through discussions with the trading companies, for example, when you are going to notify the Russian side?

A: I am aware of the announcement of the establishment of a new Russian corporation. I recognize that Mitsui & Co. and Mitsubishi Corporation are requested to decide whether they agree to join the new Russian corporation or not within one month. The policy of maintaining our interests in Sakhalin-2 will remain unchanged. On the 5th, I told President and Chief Executive Officer Hori of Mitsui & Co. that we would like Mitsui to consider participation in the project in a positive light. We are now coordinating to have a meeting with Mitsubishi Corporation as soon as possible.
On the other hand, it is necessary to closely review the decisions made by the Russian government, and to consider specific measures going forward. I would like to refrain from commenting further on the status of discussions with the relevant parties, including details such as the terms and conditions of the investments, at this time.
In any case, the government and the private sector will work together to ensure a stable supply of LNG, and we have already shared our basic policies. Therefore, we would like them to start the process once conditions are met.

Sakhalin-1

Q: Regarding Sakhalin-1, not Sakhalin-2, Russian President Putin signed a Presidential decree on August 5, prohibiting the sale of Sakhalin-1 shares to companies in unfriendly countries, including Japan, until October 31. Could you tell us your view of Russia's goals with this decree, and what information gathering and analysis is currently being done? Also, how do you think the decree will affect the continuation of the Sakhalin-1 project and the interests of Japan?

A: I am aware of the issuance of the Presidential decree that you mentioned. I recognize that we will not be able to trade stocks in the Sakhalin-1 project until the end of the year. However, we are currently reviewing the details, so I would like to refrain from commenting on the effects of this issue based on prior judgment.
Japan relies on the Middle East for about 90% of its crude oil imports, and Sakhalin-1 is a valuable non-Middle Eastern source. It remains our policy to maintain the interests of Japanese companies.
In any case, the government and the private sector will work together in order to ensure a stable supply of energy, taking every possible precaution.
The point is to stop the stakeholders from trading their interests in Sakhalin-1 to third parties or other countries without permission. We will continue to maintain our interests as our basic policy, so there will be no change to the situation.