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Japan hits Russia's 'unilateral' annulment of Far East oil deal

SPECIAL TO WORLD TRIBUNE.COM
Monday, October 2, 2006

Japan has blasted Russia's lack of "transparency" in blocking a major international oil deal in the Far East.

Japanese Ambassador to Russia Yasuo Saito told the Sakhalin Oil and Gas Conference in Yuzhno-Sakhalinsk on September 27, that recent Russian actions against the Sakhalin-2 gas venture, were "disappointing," Radio Liberty/Radio Free Europe reported.

He stressed that Russia's "one-sided, unilateral annulment of a three-year-old governmental approval [for the project] cannot [escape] the criticism that the decision lacked procedural transparency. This is disappointing with regards to investors' perception of Russia as an investment market."

The Russian government announced on September 18 that it has withdrawn environmental approval granted in 2003 for the Sakhalin-2 liquefied natural gas (LNG) project, in which Royal Dutch Shell holds a 55 percent stake with the rest divided between Japan's Mitsui and Mitsubishi.

Saidto said the deal is of key importance to Japan, and that Russia had not taken the interests of Moscow's partners into consideration, news agencies reported.

Russian Foreign Minister Sergei Lavrov told the conference that Russia has no intention of pushing foreign businesses out of the energy sector, mosnews.com reported.

He stressed that unspecified "assertions about 'revisions' of [production-sharing agreements] PSAs and especially about squeezing foreigners out of the Russian energy sector have absolutely no basis whatsoever."

But Japanese international broadcaster NHK noted that Tokyo is following with concern Lavrov's plans to visit after the conference some Russian-held islands in the Kuriles, which are also claimed by Japan.

Now that Russia is awash in petrodollars, the government is reportedly seeking to ease the foreigners out in favor of domestic, state-run firms like Gazprom and Rosneft. London's "Financial Times" wrote on May 25 that the Russian authorities are considering revising some existing oil and gas deals with foreign partners in order to further tighten Russian state control over energy resources.

The islands have been the subject of much attention by top Russian officials in recent months.


Copyright © 2006 East West Services, Inc.

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