Trading Firms Downgrade Sakhalin - 2 Stakes
Two of Japan's major trading houses say their stakes in an energy project in Russia's Far East are worth considerably less since Moscow called for Russian companies to take over the project.
The combined asset value of the Japanese investments in Sakhalin-2 has been downgraded by 210 billion yen, or about 1.6 billion dollars.
The adjustments by Mitsui & Co. and Mitsubishi Corporation appear in their earnings reports for the quarter ended in June.
Mitsui cut the asset value of its stake by 137 billion yen, or about 1 billion dollars, from the amount at the end of March.
Mitsubishi's number was down by 81 billion yen, or just over 600 million dollars.
The downgrades come after Russian President Vladimir Putin ordered the project's operator to be replaced by a Russian company, throwing the development into uncertainty.
A Mitsui official described its estimate as conservative... pointing to what the official called "a certain level of downside" in its revenue.