Russia's Oil and Gas – State Control, the Environment and Foreign Investment: Battle for Sakhalin

The World’s largest oil and gas companies are working off Sakhalin Island in Russia’s Far East to develop a new energy province. The Sea of Okhotsk has the potential to become another North Sea, located next door to Asia’s energy-hungry economies.

The World Today Published 1 November 2006 Updated 26 November 2020 4 minute READ

The Kremlin wants a greater share of the profits and is pressing the foreign companies to reconsider the terms of their involvement. This has prompted widespread condemnation in Japan, Europe and the United States and added to the growing concerns about Russia’s reliability as an energy partner.

At peak, oil production the two Sakhalin projects will account for about seven percent of demand in the Asia-Pacific region.

These are developments of global significance that will make a major contribution to energy security. They will also bolster Russia’s economic significance in the Asia-Pacific - a key Kremlin foreign-policy goal. At the recent Valdai Discussion Club of policy analysts and journalists, Russian President Vladimir Putin stated that the share of Russian energy exports going to Asia should be increased from the current three percent to around thirty percent over the next ten to fifteen years.

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