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Marubeni cuts exposure to Russia as it writes down stake in Sakhalin-1 project -Breaking

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© Reuters. FILEPHOTO: Marubeni Corp’s logo can be seen at Tokyo, Japan’s company headquarters on May 10, 2016. REUTERS/Toru Hanai/File photo

TOKYO (Reuters). Japanese trading house Marubeni Corp claimed on Friday that Russia’s exposure had been reduced by 12.6 Billion yen ($97 Million) during the last year. The main reason was the reduction of its share in Sakhalin-1, the country’s oil-producing project.

The company stated that its net exposure to Russia (including long-term debt and fixed assets) was down to 12.3 Billion yen at the end March from 24.9 Billion yen one year ago.

Masumi Kaskinoki, Marubeni’s Chief Executive Officer stated at a press conference that the majority of the decrease in exposure is due to the lower valuation of our share in Sakhalin oil and gas development (SODECO). He said it also considered the impact of low prices for Russian oil in light of the Ukraine crisis.

Marubeni has a 12.3% interest in SODECO. This Japanese consortium owns 30% of Sakhalin-1. Exxon Mobil Corp (NYSE: ) has announced its intention to retire.

According to Japanese government policy, Marubeni will retain its Sakhalin-1 stake, Kakinoki stated. However, it would like to leave due to war conditions.

He stated that Russia accounts for 0.5% of the total foreign exposure of the United States at 2.7 Trillion yen. However, there won’t be any major problem even if it does.

Marubeni stated in April that it would block all transactions from Russia except those subject to sanctions and terminate any existing agreements as soon as possible.

Kakinoki stated again that Marubeni did not intend to invest in energy projects in Russia.

($1 = 130.4300 yen)

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