Sakhalin Oblast
Russia's second-wealthiest region after Tyumen, Sakhalin changed hands between Russia and Japan four times before 1945. LNG declined 2% in 2024; Japan maintains 9% LNG import dependency. By 2026, ExxonMobil's stake sale deadline arrives.
Sakhalin is Russia's richest region per capita after Tyumen—an island that changed hands between Russia and Japan four times before 1945, now producing 4% of global LNG while Japan maintains strategic stakes despite supporting sanctions against Moscow.
Japan unilaterally claimed sovereignty over the entire island in 1845, but Russian settlers established facilities in the 1850s. The 1855 Treaty of Shimoda allowed both nationals to inhabit Sakhalin—Russians in the north, Japanese in the south. A Czarist penal colony opened in 1857. After the Russo-Japanese War, the 1905 Treaty of Portsmouth transferred southern Sakhalin to Japan, which administered it as Karafuto Prefecture with capital Toyohara (now Yuzhno-Sakhalinsk). In August 1945, Soviet forces seized the entire island and the Kuril chain, displacing the Japanese population.
Oil transformed the remote territory. The Sakhalin-I consortium operates three offshore fields: Chayvo, Odoptu, and Arkutun-Dagi. ExxonMobil withdrew in March 2022 following Russia's Ukraine invasion, writing off $4.6 billion. Moscow set a January 1, 2026 deadline for selling Exxon's 30% stake. Japan's SODECO controls 30%, while Rosneft and India's ONGC Videsh each hold 20%.
Sakhalin-II hosts Russia's first LNG plant, supplying about 4% of global markets. Gazprom owns nearly 77.5%, with Japan's Mitsui (12.5%) and Mitsubishi (10%) retaining stakes. Production declined in 2024: LNG fell 2% to 10.2 million tonnes; Sakhalin-I oil and gas dropped 9.8%. The fields are aging—production has trended downward since 2020.
Yet Japan maintains participation despite sanctions support. Tokyo's 2025 Diplomatic Blue Book explicitly states that Sakhalin projects 'are important for Japan's energy security.' Japan relies on Russia for 9% of its LNG imports, mostly through long-term Sakhalin-II contracts. Plans for a third LNG production train remain uncertain—absent from Russia's 'Energy Strategy until 2050.'
By 2026, Sakhalin will demonstrate whether energy interdependence survives geopolitical rupture—an island where Japanese money and Russian gas continue flowing despite Western sanctions, territorial disputes, and diplomatic hostility.