7 Unresolved Issues in Sakhalin 2 Talks

Posted by Bill Belew on May 10th, 2010 in Japan | Comments Off

Mitsubishi Corp and the Russian Government is trying to resolve the many issues surrounding the Sakhalin 2 gas project.

Trillions of yen have been spent on the unfinished project and it is getting harder and harder for Mitsubishi, Mitsui and Royal Dutch Shell to keep working at something they are losing interest in.

Still, the more you invest, the harder it is to cut your losses and pull out.

Unresolved issues – sakhalin-2.jpg

1. how much the state-run monopoly Gazpromm will participate

2. rising costs of the project

3. environmental impact of the project

4. Russian government's will to cooperate or NOT.

5. timely completion of the project

6. shareholder lawsuits IF the three companies pull out

7. nationalism involving resources

Russia was happy to have the Japanese and Dutch companies pony up all the money and technology to build the project. Now that they can see a LOT of money being made, they don't even want to renegotiate. Russia wants majority control and threatens environmental lawsuits and such if they don't get it.

Of course, if Gazpromm does get control, the environment will not be as damaged as was thought.

Quite a contradiction.

What do you think?


 

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