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INDIAN INVOLVEMENT IN SAKHALIN 1 PROVIDES AN IMPLICIT GUARANTEE TO JAPAN

YB WEB DESK. Dated: 8/8/2022 1:20:35 PM

New Delhi,Aug 07 (L-R) Location of Sakhalin Island and Location of Sakhalin I and II As Exxon readies to exit Sakhalin 1, the Russians are not making any threatening noises on Sakhalin 1, unlike in Sakhalin 2. For Japanese companies in Sakhalin 1, certainly, Russia would not seek to destabilize the project because of Indian involvement India’s relationship with Russia and its larger predecessor, the Union of Soviet Socialist Republics (USSR), dates back decades. Post-Independence Indian leaders were inclined to the USSR’s ideological rhetoric, especially after the NixonKissinger administration sent the Seventh Fleet to the Bay of Bengal when India intervened successfully in 1971 to end the genocide in then-East Pakistan. That set back India’s relations with the US for decades until the more recent rapprochement during the leadership of Prime Ministers Manmohan Singh and Narendra Modi. Meanwhile, many in India conflate relations with the now disappeared USSR with Russia, although of course, they are entirely different countries with the USSR having been a communist nation or union of communist states, and Russia being an autocracy. During the Cold War, India largely pursued a “non-aligned policy” which in practice only meant “not-aligned to the US, and rather tilted to the USSR” as indeed did over a hundred other newly independent nations, presumably because of the perception that the “global North” was a grouping of erstwhile colonial powers. The Russian Federation of to day sees itself as the rump successor to the USSR. India-USSR trade boomed via the Rupee-Rouble Agreement that skirted the US dollar from 1953 till the collapse of USSR in 1991. The cataclysmic battles between Russia and Ukraine are an unhinged tragedy. Every world leader worth his/her salt has called on the protagonists to stop fighting and negotiate, although in a clear failure of “global governance” there is no credible negotiating body in this respect given that Russia is a P-5 member of the UN. Purely on the commercial oil and gas front, Sakhalin 1 and Sakhalin 2 are projects on and off the Russian island of Sakhalin, the southern portion of which was annexed by Russia in the dying days of World War II that was part of Imperial Japan from 1905 (when Japan defeated Russia) till 1945. In the Sakhalin 1 oil and gas project, India’s ONGC Videsh has had a 20% equity stake since year 2001, which it took with an investment of $1.5 billion to $2 billion. The project lead was Exxon, which had a 30% stake, which has voluntarily announced its intention to depart the project, declaring a force majeure and booking a loss of $3.4 billion. Japanese private sector companies Itochu and Marubeni, and Japanese government entities Japan Petroleum Exploration Co, Japan National Oil Corp are also together 30% equity-holders, with the remaining 20% being owned by Rosneft affiliates. The Russians are not making any threatening noises on Sakhalin 1, unlike in Sakhalin 2. For Japanese companies in Sakhalin 1, even government.