President Vladimir Putin has reportedly signed a decree ordering the Sakhalin Energy Investment Company to a new Russian company, which will decide if foreign stakeholders can remain.
Sakhalin Energy is the consortium behind the Sakhalin-2 oil and gas project in Russia’s far east that has several foreign participants. The decree reportedly said other participants must ask Moscow for a new stake within a month, and those who decide not to take part may not be offered compensation.
Russia’s state-owned gas company Gazprom RU:GAZP, which owns about 50% of Sakhalin Energy, will be allowed to keep its stake. Shell SHEL, -0.59% owns a 27.5% stake, Mitsui 8031, -5.51% holds 12.5% and Mitsubishi 8058, -5.38% owns 10%.
The project produces around 10 million tons of liquified natural gas a year, and supplies about 4% of the world’s current LNG market, with Japan, South Korea and China among its main customers.
Reuters reported in May that Shell was in talks with three Indian energy companies to sell its stake in the Russian company, after it announced earlier this year it was exiting Russian projects over the country’s invasion of Ukraine. In May, Shell announced a charge of $3.9 billion in the first quarter over its exit from Russia.