TOKYO – Japan should be cautious about joining Western nations in pulling the plug on large-scale energy projects in Russia over its invasion of Ukraine, industry minister Koichi Hagiuda said Tuesday.
“I believe employing a wait-and-see stance while maintaining interests is one way,” Hagiuda said, explaining that Russia would not feel pain if a third country such as China took over interests the Japanese government and companies hold in the oil and gas projects on Sakhalin island in the Russian Far East.
Even if Japanese investors abandon their stakes in the projects, “it would not make sense if a third country takes them and Russia feels no pain,” the minister of economy, trade and industry told a House of Councillors committee meeting.
Hagiuda said Japan is cooperating with other Group of Seven industrialized nations and the broader international community concerning the Sakhalin projects.
Other G-7 members are Britain, Canada, France, Germany, Italy and the United States, plus the European Union.
Last week, U.S. oil major Exxon Mobil Corp. announced its withdrawal from the Sakhalin 1 project, while Britain’s Shell PLC said it is exiting the Sakhalin 2 project in the wake of Russia’s military attack on Ukraine Feb. 24.
Apart from the energy sector, Japan has been coordinating with Western powers over sanctions on Russia, freezing the assets of individuals, including President Vladimir Putin and oligarchs, and excluding seven of Russia’s banks from the SWIFT global payments network to disrupt the country’s trade and money transfers.
From the viewpoint of its geographical vicinity and the necessity to decentralize supply sources from the Middle East, Japan had recently promoted energy imports from Russia, which account for 3.6 percent of Japanese crude oil imports, and 8.8 percent of its liquefied natural gas imports.