Russia seizes control of Sakhalin 2 oil and gas project, says report

Ukraine's grain exports plunge 43% in June as war takes its toll

Russian President Vladimir Putin signed a decree to transfer rights to the Sakhalin 2 oil and gas project to a new Russian company, Japanese public broadcaster NHK reported.

Stakeholders have one month to say whether they’ll take stakes in the new company, the report said. Japan’s Mitsui & Co. and Mitsubishi Corp. are partial owners of Sakhalin Energy Investment, with a 12.5 per cent stake and a 10 per cent stake in the operator, respectively. 

The decree cited threats to Russia’s national interests and economic security, according to a statement dated June 30, issued by the Kremlin and signed by Putin. 

Energy giant Shell Plc holds a 27.5 per cent stake in Sakhalin Energy Investment Co., the operator of the facility. Shell previously said that it would exit the investment after Russia invaded Ukraine, and CEO Ben van Beurden said earlier this week that they’re making progress selling their stake in the project.

Japanese trading houses Mitsubishi Corp. and Mitsui & Co. own a combined 22.5 per cent of the Sakhalin project, and a majority of the gas produced there supplies Japan. While Japan has initially been quick to impose a range of sanctions on Russia over its invasion of Ukraine, Prime Minister Fumio Kishida said in March the country won’t withdraw from the Sakhalin-2 liquefied natural gas export project.

Missiles hit apartments, resort

Russia flattened part of an apartment building while residents slept on Friday in missile attacks near Ukraine's Black Sea port of Odesa that authorities say killed at least 21 people, hours after Russian troops abandoned a nearby outpost at Snake Island.

Neighbours in the resort village of Serhiivka helped workers comb through the rubble of the nine-storey apartment block, a section of which had been completely destroyed at 1:00 a.m.

Walls and windows of a neighbouring, 14-storey apartment block had also been damaged by the blast wave. Nearby holiday camps were also hit.

Ukraine grain exports plunge 43% 

Ukraine’s grain exports plunged 43 per cent year-on-year to 1.41 million tonnes in June, the agriculture ministry said on Friday, highlighting the damage being inflicted on a key sector of the economy by Russia’s invasion.

Still, grain exports for the 2021-22 season ending June 30 rose 8.5 per cent to 48.5 million tonnes, driven by strong shipments prior to the invasion, the data showed.

Ukraine’s grain exports have slumped since the start of the war as its Black Sea ports – the key route for shipments – have been largely closed off, driving up global food prices and prompting fears of shortages in Africa and the Middle East The ministry data showed wheat exports rose to 18.7 million tonnes in the 2021/22 season from 16.6 million a year earlier.

Additional support from EU

The European Union will propose €1 billion ($1.04 billion) in short-term financial relief for Ukraine to shore up the war-ravaged nation’s urgent cash needs, as Germany continues to hold up talks on a larger package, according to people familiar with the matter. 

EU officials prepared the back-up option on Thursday after the European Commission, the bloc’s executive arm, failed to secure Berlin’s blessing for a package that would entail € 8.8 billion in loans. 

In addition to qualms over the structure of the financing, Germany is calling for grants rather than loans, the people said.  

The emergency funding needs to be approved by all member states before it can be disbursed.