Exxon Exits Russia Empty Handed
(PatriotWise.com) – Following seven months of discussions on an orderly transfer of its 30 percent stake in a major oil project, last Monday, Exxon Mobil Corp. announced that it had left Russia completely after Russian President Vladimir Putin expropriated its properties. What is not clear is if Exxon received any compensation for the assets, which are valued at over $4 billion.
Since Moscow’s invasion of Ukraine in late February, BP, TotalEnergies, Equinor, and Shell have all either transferred properties to Russian partners or abandoned operations in the country.
A spokesperson for Exxon said the company “made every effort” to negotiate with the Kremlin.
Exxon said it “safely exited” Russia after Moscow “unilaterally terminated” its interests in the Sakhalin-1 oil and gas project earlier this month. The company has been trying to relinquish the operation of Sakhalin-1 since the beginning of March when it announced it would abandon its assets.
At the time, Exxon said it would coordinate the transfer of operation with its partners, Russia’s Rosneft, India’s ONGC Videsh, and Japan’s SODECO, to ensure the transfer would be secure.
On October 7, Putin seized Exxon’s shares in the joint venture and transferred them to a government-controlled company.
Since 2014, Exxon has been reducing its presence in Russia, following sanctions against Moscow for annexing the Crimean peninsula from Ukraine.
This year, Exxon removed its expatriate workers and shut down its lubricant and chemical businesses in Russia. Before the Ukraine Invasion, output at the Sakhalin-1 project was 220,000 barrels per day. By July, it had dropped to 10,000 barrels per day.
Exxon had pledged to take its time to ensure a safe transfer to a new operator to avoid environmental accidents, spills, or shutting down the lights for cities supplied by the Sakhalin-1 project. But Russia’s terms blocked it from transferring operations or negotiating a possible sale to Indian or Japanese partners who indicated an interest in keeping Sakhalin-1’s supply.
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