Russia Takes Control of Sakhalin-2

On Thursday, Russian President Vladimir Putin signed an order to assume responsibility for the Sakhalin-2 Project.

As the economic fallout from the Ukraine war continues, Shell and Japan's Mitsui or Mitsubishi could be forced to sell their investments.

Shell, the oil giant, stated that  "We are aware of the decree and are assessing its implications." According to the decree, a new company would assume all rights and obligations for Sakhalin Energy Investment.

Shell stated in February that it would sell its Russian investments because of the conflict in Ukraine. This includes the Sakhalin 2 facility, which is located in Russia's far East. It stated in April that it would need a PS3.8bn to leave Russia.

Gazprom is half-owner and operator of the project, which supplies approximately 4% of the current world liquefied natural gases (LNG). Gazprom will retain its stake. However, other shareholders must request a share in the new company from the Russian government within one month.

The government will decide if they want to keep the stake. According to previous reports from The Daily Telegraph, Reuters, Shell is in negotiations with potential buyers to acquire its stake in the project. This includes some from India and China.

Ben van Beurden, the chief executive of Shell, stated Wednesday that Shell was making "making good progress" in its plan to exit the joint venture.

He said, "I cannot tell you exactly where we are because it's a commercial process so I have to respect confidentiality, but I can tell you when I got an update last week, I was really pleased with where we are,"