Russia: Major Japanese trading companies Mitsui & Co. and Mitsubishi Corp. cut value of stakes in Sakhalin 2 energy project citing growing business uncertainty
"Mitsui, M'bishi cut value of stakes in Sakhalin 2 energy project" 2 August 2022
Major Japanese trade houses Mitsui & Co. and Mitsubishi Corp. said Tuesday they have trimmed the value of their stakes in the Sakhalin 2 oil and natural gas project in the Russian Far East by a combined 217.7 billion yen ($1.7 billion), citing growing business uncertainty.
Mitsui cut its investment value by 136.6 billion yen and Mitsubishi by 81.1 billion yen after Russian President Vladimir Putin signed a decree in late June to seize control of the project with the creation of a new operating company.
The value reductions would make net assets of the two Japanese companies smaller, but they said there would be no effect on their profit or loss.
Following Russia's invasion of Ukraine, the two had already cut the asset value by a total of about 94 billion yen in their business years that ended in March.
Mitsui and Mitsubishi hold stakes of 12.5 percent and 10 percent, respectively, in the energy project.
"We will properly deal with the situation following consultations with the Japanese government and project partners," Tetsuya Shigeta, Mitsui's chief financial officer, said separately.