Japan has announced that it will exclude three Russian energy projects from sanctions, in which Japanese companies are actively participating, according to a statement posted on the website of Japan’s Economy Ministry. The exemption is intended to cover projects that are considered critical to Japan’s energy security.
The Economy Ministry stated that “service operations, which the Minister of Economy, Trade and Industry has identified as particularly necessary to ensure the energy security of our country, are not subject to the ban.” This waiver applies to architectural and engineering services related to the exploration, extraction, liquefaction, storage, transportation, and transshipment of crude oil and combustible natural gas, as well as operations incidental to these activities. The exempted projects include Sakhalin 1, Sakhalin 2, and Arctic LNG 2.
The exemption will take effect from September 30, 2023, and will also apply to the provision of services to Russian subsidiaries of Japanese companies.
This announcement comes after Japan’s previous plan to ban the provision of architectural and engineering services to Russia was revealed on May 26. However, the effective date of this measure was not specified. Japan has been aligning its Russia policy with Western states, which have implemented several rounds of sanctions against Moscow in response to the military operations in Ukraine.
Despite this alignment, Japan has been hesitant to impose sanctions on the Russian energy sector and has emphasized the importance of Russian energy for its own energy security. The country received an exemption from the Western price cap on Russian oil imports, which resulted in supplies from Sakhalin-2 being excluded. Additionally, Japan has maintained its stakes in joint energy projects with Russia.
It is worth noting that Japan has a particular interest in Russian energy resources. The country has limited domestic energy reserves and relies heavily on imports to meet its energy needs. Therefore, securing access to stable and reliable energy sources, including those in Russia, is of utmost importance to the Japanese economy.
By exempting these energy projects from sanctions, Japan aims to safeguard its energy security and maintain its cooperation with Russian companies in the energy sector. This decision reflects Japan’s strategic priorities and its recognition of the significance of the Russian energy sector in meeting its own energy demands.
In conclusion, Japan has exempted three Russian energy projects from sanctions, citing their critical importance to Japan’s energy security. The exemption covers service operations related to oil and natural gas exploration, extraction, transportation, and storage, as well as incidental operations. This decision aligns with Japan’s emphasis on securing stable energy resources and its reluctance to impose sanctions on the Russian energy sector.