Business titans mixed on the issue of energy imports from Russia

A survey by Asahi Shimbun found that 31 of Japan’s top 100 companies support moves to suspend or reduce resource imports from Russia following its invasion of Ukraine, while a plurality of companies avoided taking a stand.

Asked whether Japan should continue to import Russian oil and natural gas, 26 called for a reduction while five said it should stop imports immediately or during or after next year. Sixty-seven companies answered that they could not say one way or the other, or answered “other”.

Tokyo has already announced its intention to phase out Russian oil imports in line with Europe and the United States. However, it intends to continue importing liquefied natural gas from Russia, as the country accounts for around 10% of Japan’s LNG imports.

Akira Shimada, senior executive vice president of Nippon Telegraph and Telephone Corp. (NTT), said, “Japan should hedge its risk by turning to suppliers who can provide a more stable supply.

Business leaders who did not respond to either explained why they did not take a position.

Takeshi Niinami, Chairman of Suntory Holdings Ltd., said: “We need to make a comprehensive decision, including which countries to favor,” when Japan withdraws from Russia’s Sakhalin 2 LNG project.

Akihiro Nikkaku, Chairman of Toray Industries Inc., said, “The business community should support government policy.

Katsuya Nakanishi, chairman of Mitsubishi Corp., which invested in the Sakhalin 2 project, said, “This is a difficult issue directly related to energy security.

“A decision must be made after considering the impact of a supply disruption (from Russia) on the national economy and society as a whole,” Nakanishi added.

The survey also showed that 53 companies have suspended or reduced their Russia-related operations or transactions since the start of the invasion.

Excluding companies with no Russia-related activity, more than 70% of companies scaled back or downsized their operations, clearly indicating a move away from Russia.

Forty-two said they had suspended operations with Russia while 11 said they had not stopped but reduced their operations.

Their operations range from production, sales and transportation in Russia to financial, telecommunications and internet services.

Two companies indicated that they were still engaged in Russia-related activities in the same way as before.

Asked about the impact of the invasion on their operations, 24 companies cited “suspension or reduction of Russia-related activities”. Multiple responses were allowed.

However, many of them said that the impact on their trading performance would be limited because the transaction amounts are low.

Comments are closed.