Energy Security Gains Importance Due to Ukraine War... Germany, Russia, and Others Also Nationalize Energy Sector
[Asia Economy Reporter Park Byung-hee] The French government announced plans to fully nationalize EDF, a nuclear power company in which it holds an 84% stake. Cases of nationalizing energy industries are increasing as the importance of energy security grows amid the Ukraine war.
French Prime Minister ?lisabeth Borne stated in a speech to the National Assembly on the 6th (local time), "The French government clearly intends to have 100% control of EDF."
The French government is expected to strongly promote its nuclear expansion policy through the full nationalization of EDF. EDF secured orders to build six new nuclear reactors under President Emmanuel Macron's nuclear expansion plan. However, due to heavy debt and losses caused by soaring energy costs this year, attracting investment was uncertain. This move now allows the company to expect government support going forward.
German energy company Uniper, which applied for bailout funds on the 30th of last month, is also likely to be nationalized in the future. On the 5th, the German government amended the Energy Act to allow the government to acquire stakes in companies struggling due to soaring gas costs. This established the legal basis for the government to inject funds into Uniper and nationalize it.
Russian President Vladimir Putin recently signed a bill that could nationalize the Sakhalin-2 gas development project. Currently, Russia's state-owned gas company Gazprom owns only 50% of the Sakhalin-2 gas development project. The remaining shares are held by British oil company Shell (27.5%), and Japanese trading companies Mitsui & Co. and Mitsubishi Corporation, holding 12.5% and 10%, respectively.
With the West tightening energy sanctions on Russia, Shell and the Japanese trading companies face a difficult choice of whether to continue joint gas development with Russia. If Shell and the Japanese companies relinquish their shares, Gazprom will own 100% of the Sakhalin-2 gas development project.
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