Identifier
Created
Classification
Origin
06TOKYO5488
2006-09-22 10:34:00
CONFIDENTIAL
Embassy Tokyo
Cable title:  

JAPAN QUESTIONS RUSSIAN MOTIVES REGARDING

Tags:  PREL PGOV EPET ENRG RU JA 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 005488 

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/22/2016
TAGS: PREL PGOV EPET ENRG RU JA
SUBJECT: JAPAN QUESTIONS RUSSIAN MOTIVES REGARDING
SAKHALIN-2 ENERGY PROJECT DECISION


Classified By: Acting Political Minister Counselor Carol Reynolds. Rea
sons 1.4 (B) (D)

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 005488

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/22/2016
TAGS: PREL PGOV EPET ENRG RU JA
SUBJECT: JAPAN QUESTIONS RUSSIAN MOTIVES REGARDING
SAKHALIN-2 ENERGY PROJECT DECISION


Classified By: Acting Political Minister Counselor Carol Reynolds. Rea
sons 1.4 (B) (D)


1. (C) Summary. MOFA and Russian Embassy officials provided
alternative interpretations of Russia's July 18 decision to
revoke approval of a key environmental study on the
Sakhalin-2 energy project, which has effectively stopped
progress on the joint venture. Russia's motives for
rescinding the 2003 order remain unclear to the Japanese, who
strongly doubt Moscow's official explanation about
environmental concerns. However, Russian embassy diplomats
told us categorically that project "was not closed." End
Summary.

--------------
Russia Rescinds Order
--------------


2. (C) On September 22, MOFA European Affairs Russia Division
Principal Deputy Director Kazuhiko Nakamura and Russian
Embassy First Secretary Alexey Ovchinnikov updated Embassy
Political Officer on the status of the Sakhalin-2 energy
project. Referring to Japanese and other media reports that
have provided varying accounts of the Russian action,
Nakamura stated that Japanese government officials had
confirmed as "fact" that the Russian Ministry of Natural
Resources had decided to cancel its own July 2003 order
approving the national environmental review of the Sakhalin-2
project. The ministry's original approval of the
environmental study had been a necessary precondition to
launch the energy project, he added. Japanese ambassador
Saito received the news during a September 18 meeting with
Russian natural resources minister Tortonov shortly after
Russia's public announcement, according to Nakamura.

--------------
Moscow's Motives Unclear
--------------


3. (C) Russia's motives for rescinding the 2003 order
remained unclear, Nakamura said. During the September 18
meeting with Saito, Tortonov claimed that the Sakhalin-2
project had "caused environmental damage not in conformity
with Russia's environmental law." Nakamura noted, however,
that MOFA is aware of rumors circulating in Moscow that
Russian business and government official have begun to
pressure Sakhalin Energy for terms more favorable to Russian
commercial interests. Those rumors include reports that: 1)
GASPROM is attempting to increase its share in the project,
and 2) "high-ranking" officials opposed to the SPA regime,
which they believe President Yeltsin established during the
1980's under terms favorable to foreign investors, hope to
revise the regime in their favor. Japan officials "are not
sure which rumor is true," Nakamura added.


4. (C) Japan continues to meet with Sakhalin Energy
representatives, as well as Mitsubishi and Mitsui officials,
and UK and Dutch government officials in Moscow and Tokyo to
resolve the issue. Nakamura said that the government of
Japan wanted to promote direct consultations between Sakhalin
Energy Company representatives and officials from the natural
resources ministry.

--------------
Sakhlin-2 Not Closed
--------------


5. (C) Russian embassy diplomat Ovchinnov concurred that
Moscow officials were concerned about the Sakhalin's
project's impact on the environment, but stated categorically
that project "was not closed." Referring to the
environmental concerns that had been raised during the
construction of the oil pipeline in Alaska, he argued that
energy projects of this nature often run afoul of
conservation efforts. Russian officials will now undertake
to determine the appropriate "legal procedures that Japan

TOKYO 00005488 002 OF 002


will follow" to put the project back on track, Ovchinnov
opined.
SCHIEFFER