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.
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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.
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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.
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"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.
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