Japan breaks relation with Russia over Ukraine invasion

According to Alexander Panov, a former Russian ambassador to Japan, the situation in Ukraine has caused the relationship between Russia and Japan to break down.

However, given that similar situations have occurred in the past, this should not be seen as a point of no return. For instance, the official said that following a deterioration during the Soviet period, the nations were able to repair their bilateral ties.

Panov stated in response to Putin’s order that the Sakhalin-2 oil and gas project operator’s property be transferred to state control that this would not impede the deliveries of liquefied natural gas to Japan. He claims that while Tokyo is still interested in gas supply, Russia does not want to lose the Japanese market.

On June 30, the Russian president issued a decree outlining extraordinary steps to be taken in the fuel and energy industries in response to hostile foreign acts. The agreement mandates that Sakhalin Energy replace the operator of the Sakhalin-2 oil and gas project and give the state ownership of the company’s assets.

Both Gazprom Sakhalin Holding and the new operator firm will possess shares in the authorized capital of the new Sakhalin-2 operator that will be created in place of Sakhalin Energy.

The Russian government must be informed one month in advance if foreign participants want to accept their proportionate share in the new operator. The Japanese government is hopeful that its rights and interests in the project won’t be harmed by Moscow’s decision.

On the Russian island of Sakhalin, there is a development for oil and gas called Sakhalin-2. Offshore Sakhalin Island in the Okhotsk Sea, it involves the development of the Piltun-Astokhskoye oil field and the Lunskoye natural gas production, as well as related infrastructure on land.