Latest news with #Sakhalin-1
Time of India
14 hours ago
- Business
- Time of India
The tariff puzzle
Trump gets Exxon back in Russian oil sector. Will he still insist on penal duties for India? The Trump-Putin summit in Alaska has raised more questions than answers for India. New Delhi was hoping that a modus vivendi between Washington and Moscow on the Ukraine war would stave off Trump's threatened secondary sanctions. It was a logical assumption: If Trump and Putin can do business, why can't India also have a commercial relationship with Russia? But what transpired in Alaska was somewhat strange. While Trump and Putin appeared to agree on a peace deal to end the war – though details are yet to be worked out – there is no word on the secondary sanctions. Even more worryingly for New Delhi, Washington has postponed a scheduled meeting of trade officials on Aug 25 that was supposed to clear the air on the secondary tariffs. Those come into effect on Aug 27, doubling tariffs on Indian exports to US to 50%. Interestingly, on the same day Putin met Trump, he signed a new decree that could allow American oil major Exxon Mobil to regain shares in the lucrative Sakhalin-1 oil and gas project. Exxon, before Russia's full-scale invasion of Ukraine, held 30% operator share in the project. If Exxon actually returns to Russia, Trump's secondary sanctions on India for buying Russian oil have no leg to stand on. That said, on the bilateral trade deal, India has done well to stick to its guns. Also, before Trump decided to torpedo a deal, New Delhi had been as flexible as possible. But it simply cannot compromise on the farm sector. In fact, no country can afford to play with the livelihood of its farmers. Take Japan. Although Trump forced Tokyo to increase imports of American rice by 75%, it has become a hot-button political issue in Japan with many Japanese buyers vowing to reject the imports. Similarly, for India's large agricultural sector that employs around 46% of the workforce, opening up to duty-free US agri-imports is impossible. However, in non-agricultural sectors there is ample room for negotiations. US also needs to keep in mind the larger geopolitical play here. India can be a viable option in the China+1 strategy. But Washington has to cut New Delhi some slack. If it continues pressuring India through tariffs and sanctions, New Delhi will have no choice but to increase its alignment with Brics or even revive the Russia-India-China platform. Note that Chinese foreign minister Wang Yi is beginning a visit to New Delhi today. Trump, therefore, should think hard before trying to drag India over the tariff coals. Facebook Twitter Linkedin Email This piece appeared as an editorial opinion in the print edition of The Times of India.
Time of India
a day ago
- Business
- Time of India
Russia decree opens door for Exxon return to Sakhalin-1 project
Russian President Vladimir Putin on Friday signed a decree that could allow foreign investors, including top US oil major Exxon Mobil, to regain shares in the Sakhalin-1 oil and gas project. The signing of the decree comes on the day Russian president Vladimir Putin meets Donald Trump in Alaska for a summit where opportunities for investment and business collaboration will be on the agenda, alongside talks to find peace in Ukraine. Friday's decree was published as a follow-up to one Putin signed in October 2022, which ordered the seizure of the Sakhalin-1 project. Exxon previously held a 30 per cent operator share in the lucrative project, and is the only non-Russian investor to have quit its stake. Exxon did not immediately reply to Reuters request for comment. The path to Western investment returning to Russia is unclear given the US and European Union would need to lift far-reaching sanctions to facilitate investment. Companies who might wish to return, having spent significant amounts of money to exit the country three years ago, also face high barriers put up by the Russian government. Trump and his team have considered what sanctions they may be able to lift quickly in the case of progress in talks. Sakhalin-1 has to date not been directly designated under extensive US sanctions on Russian energy. The decree stipulates that foreign shareholders must undertake actions to support the lifting of Western sanctions if they want to regain their share. They must also conclude contracts for supplies of necessary foreign-made equipment to the project, and transfer funds to Sakhalin-1 project accounts. Exxon took an impairment charge of $4.6 billion to exit its Russian business after Moscow sent troops into Ukraine in February 2022. In December 2024, Putin signed a decree extending the sale period for the unclaimed Exxon stake in Sakhalin-1 until 2026. The October 2022 decree established Rosneft subsidiary Sakhalinmorneftegaz-shelf as the new operator, allowing the Russian government to decide foreign investors' ownership rights in Sakhalin-1. Alongside Exxon, Russian company Rosneft, India's ONGC Videsh and Japan's SODECO were partner investors. The Russian government allowed both ONGC Videsh and SODECO to keep their stakes.
Russia Today
08-04-2025
- Business
- Russia Today
Japan to keep stake in Russian LNG project
Japan will continue participating in Russian liquefied natural gas (LNG) projects on Sakhalin Island due to their strategic importance for the country's energy security, according to an annual report released on Tuesday. However, Tokyo reiterated its intention to gradually reduce dependence on Russian energy. Japan has fully supported the Western sanctions imposed on Russia over the Ukraine conflict and has introduced multiple rounds of restrictions over the past three years. Tokyo also joined the G7's $60-per-barrel price cap on Russian seaborne oil. 'The Sakhalin-1 and Sakhalin-2 oil and natural gas development projects are important for Japan's energy security in terms of ensuring a stable supply in the medium and long term, and we intend to maintain our participation in them,' the Foreign Ministry stated in the 2025 edition of its Diplomatic Blue Book, which reviews Japan's activities in the realm of foreign affairs. The ministry added that Japan will continue pursuing a policy of gradually decreasing reliance on Russian energy, including oil and coal, while minimizing the negative impact on Japanese citizens and businesses. READ MORE: UK energy giant discloses details of Russian lawsuit Japan's state-run consortium Sodeco holds a 30% stake in the Sakhalin-1 oil and gas project, while Indian state oil company ONGC Videsh owns 20%. Two subsidiaries of Russia's oil giant Rosneft hold stakes of 8.5% and 11.5%. After US multinational ExxonMobil, which previously operated Sakhalin-1, opted to withdraw from the project following the escalation of the Ukraine conflict in 2022, its 30% share was transferred to Sakhalinmorneftegaz-Shelf, a Rosneft subsidiary. Its sister project, Sakhalin-2, is one of the world's largest LNG ventures, supplying around 4% of the global market. In 2022, Russian President Vladimir Putin signed a decree transferring the assets of Sakhalin Energy, the former operator of Sakhalin-2, to a new Russia-based operator, Sakhalin Energy LLC. Foreign shareholders were allowed to take a stake in the new operator proportionate to their previous holdings. The Japanese firms Mitsui and Mitsubishi opted to retain their stakes of 12.5% and 10%, respectively, while British energy giant Shell, which held a 27.5% minus one share stake in Sakhalin Energy, declined to join the new entity. As a result, the Russian government sold Shell's stake to a Gazprom subsidiary for roughly $1 billion. READ MORE: Russian LNG exports hit new record – Kpler Though Japan does not import fuel under the Sakhalin-1 project, Tokyo considers it important for diversifying supply sources and ensuring long-term stability. In October 2022, then-Japanese Trade Minister Yasutoshi Nishimura emphasized the project's significance, noting that Japan depends on the Middle East for 95% of its oil imports. Japan is one of the world's largest LNG importers and relies on Russia for 9% of its total liquid gas supply, mostly through long-term Sakhalin-2 contracts.
Yahoo
28-03-2025
- Business
- Yahoo
Russia's gas production plummets following Ukraine's transit halt, media reports
Russia's natural gas production saw a significant decline in February, dropping 11.3% year-on-year to 57.2 billion cubic meters (bcm), according to Russian media outlet Kommersant, which cited sources familiar with Energy Ministry data. The sharp decline is primarily attributed to Ukraine halting Russian gas transit through its territory on Jan. 1 after the expiration of a 2019 transit agreement. The move has severely impacted Gazprom, Russia's state-owned gas giant, whose production fell 13.2% year-on-year to 38.2 bcm in February. With the loss of Ukrainian transit routes, Kommersant reports that Gazprom now relies almost entirely on the TurkStream pipeline, which has an annual capacity of just under 16 bcm—significantly restricting Russia's ability to export gas to Europe. Beyond Gazprom, other major Russian energy companies also reported declines in production. Novatek reduced its output by 1.5%, producing 6.4 bcm in February. Lukoil's gas production fell by 13.3% to 1.3 bcm, while Rosneft recorded a 14% drop, bringing its total production to 5.5 bcm. Gazprom Neft also reported a decline of 8.3%, producing 2.2 bcm during the month. The downturn extended beyond Russia's borders. Kommersant reported that Gazprom Neft's gas production in the NIS (Serbian oil and gas company), Badra (Badra oil field located in eastern Iraq), and Kurdistan (Iraq) fell by 20.5%, while Rosneft's output at Egypt's Zohr field declined by 21.3% compared to the previous year. The only projects that maintained their 2024 levels were Sakhalin-1 and Sakhalin-2, which produced 0.7 bcm and 1.4 bcm in February, respectively. Despite the slump, Russian price agencies told Kommersant that gas production in 2025 is expected to remain at 2024 levels as Moscow shifts its focus toward expanding pipeline exports to China and increasing LNG shipments. Read also: Ukraine's list of energy facilities banned from attacks differs from Russian version, Energy Ministry says We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Yahoo
26-03-2025
- Business
- Yahoo
Opinion - US-Russia economic reset: New day, same shakedown
Following President Trump's almost two-hour phone call with Russian President Vladimir Putin earlier this month, the White House was upbeat about the conversation. One topic discussed was the prospect of American companies striking 'deals' in Russia. There is some speculation that, as soon as the fighting stops, the U.S. will lift sanctions and companies can return to Russia to take up where they left off. Is American business ready for a reset? After the collapse of the Soviet Union, Western businesses were eager to enter the Russian market. Energy companies sought access to oil and gas reserves and consumer goods companies were keen to satisfy pent-up demand for quality imported products. The ruble crisis of 1998 and the 2008-09 financial crisis failed to dampen investors' enthusiasm, and Russia's invasion of Georgia in 2008 was scarcely a bump in the road for business. The Obama administration launched a 'reset' of relations in 2009. That ended with the seizure of Crimea in 2014. Afterward, some companies did leave, but for the most part business stayed. However, the full-scale invasion of Ukraine in 2022 changed everything. Sanctions, reputational risk and moral indignation led to the exodus of more than 1000 Western companies. As president of the U.S.-Russia Business Council during the Obama administration's reset period, I advocated for U.S. companies doing business in Russia. With the benefit of hindsight, I can answer the question I posed earlier: American companies should regard any reset in U.S.-Russia economic relations with skepticism, at least for as long as the Putin regime remains in power. While it was never an easy place for American companies to operate, Russia has gotten even worse since Putin launched the invasion. From 2022 to 2023, Russia's rating in Transparency International's Corruption Perceptions Index dropped and is now at an abysmal 156th place out of 180 countries. Most companies that left after the invasion either sold their assets at knockdown prices or had them confiscated and redistributed, usually to Kremlin-favored oligarchs. Business in Russia is sometimes hard to distinguish from criminal activity. Crypto markets flourish in Moscow, which provides a secure base for cyber criminals to conduct international money laundering operations, which in turn are often linked to drug trafficking or arms smuggling. Cyber ransom schemes against targets in Western countries are rampant, and Putin has even traded Western hostages for Russians convicted of cybercrimes. Successful enterprises, both Russian and foreign, have been targets of 'corporate raiders,' who use physical coercion as well as legal machinations to extort protection payments or to seize assets. Large Western companies were able to shield themselves, but even they underwent shakedowns. Two multibillion-dollar oil and gas projects, Exxon's Sakhalin-1 and Shell's Sakhalin-2, came in for special treatment by the state-controlled gas monopoly Gazprom. Sakhalin-1 was required to sell its gas at less than market value, and Sakhalin-2 was forced to cede 50 percent ownership at a substantial discount to Gazprom in 2006 after a shakedown by the authorities. Yukos, once Russia's leading private sector oil company listed on the New York Stock Exchange, was liquidated in 2006 in a government-orchestrated bankruptcy for the benefit of state-owned oil company Rosneft. A political motive was also evident: Yukos's founder, Mikhail Khodorkovsky, denounced government corruption during a televised meeting with Putin. He was subsequently imprisoned, ostensibly for alleged tax evasion but in reality as an object lesson to Russian businessmen to stay out of politics. Oil major BP had numerous run-ins with Russian business competitors, including one episode where the head of the company's Russian operations was poisoned and had to flee abroad for treatment. BP eventually sold its half of a jointly owned Russian company in 2013 in exchange for cash and a 20 percent share of Rosneft, the value of which was written off in 2022 after the Ukraine invasion. Hermitage Capital Management, an equity fund that was an early investor in the Russian stock market, came under attack for insisting that publicly traded companies comply with securities regulations. Seeing the handwriting on the wall, they quietly sold off their holdings and began shutting down. Corrupt Russian officials saw an opportunity: They raided the fund's office, taking corporate seals used in official documentation and using them to create false claims for value-added tax refunds. In collusion with crooked tax officials, they obtained $230 million in phony rebates. When Hermitage's lawyer, Sergey Magnitsky, blew the whistle on the scam, he was arrested and held in prison under inhumane conditions. In 2009, after months of refusing to falsely implicate his employer, Magnitsky was murdered in his prison cell. The Magnitsky Act, a U.S. law aimed at punishing human rights violations by corrupt foreign officials, was named for him. Other Russian businessmen have met mysterious ends. The case of Ravil Maganov, chairman of Lukoil, came as a particular shock. In 1998, Maganov was the lead Lukoil representative for a deal that the company I then worked for, Texaco, was negotiating. A man of integrity working in a murky business environment, he later came into serious conflict with Rosneft over another disputed project. Maganov became Lukoil's chairman in 2022 after the company's founder, Vagit Alekperov, stepped down after being placed on a sanctions list. Having reached the pinnacle of his career, it was inconceivable that Maganov would check into a hospital only to throw himself from a window. Notwithstanding any reset, reputational risks will remain in a country that has brutally invaded its neighbors, and whose leader has been indicted for, among other morally repugnant acts, kidnapping thousands of Ukrainian children. Companies jealous of their brand names should carefully consider whether to allow their logos to be associated with international war crimes like those in Bucha, to mention one example. What brought Western companies to Russia in the 2000s was the lure of an economy that, thanks to a historic rise in oil and gas prices, was growing rapidly and stoking consumer demand. That business case has vanished. The real disposable income of the average Russian has stagnated or declined for the better part of a decade. Overextended credit limits and a Central Bank discount rate of 21 percent mean few consumers are willing to buy expensive imported goods. Low-cost Chinese imports have taken over a diminished market. Companies that choose to go back to Russia should warn employees that travel to or are assigned to live there that the Putin regime arrests foreigners on flimsy or fabricated grounds, sometimes to pressure companies to make concessions, other times to use as hostages for the release of Russian miscreants held in foreign countries. That is likely to continue. Edward Verona is a nonresident senior fellow at the Atlantic Council. He was president of the U.S.-Russia Business Council from 2008 to 2013, as well as holding executive positions in the oil and gas industry in Russia. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
