ExxonMobil said it will halt new investment in Russia and discontinue operations at the oil and gas facilities on Sakhalin Island in Russia’s far east
Leaving a portfolio of operations it had valued at US$4Bn in its most recent annual report, the US-headquartered oil and gas major said it is fully in compliance with all international sanctions against Russia, in response to the Kremlin’s war in Ukraine.
ExxonMobil said it "supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation".
"We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people. We are deeply saddened by the loss of innocent lives and support the strong international response," the company said.
ExxonMobil operates the Sakhalin-1 project on behalf of an international consortium of Japanese, Indian and Russian companies and said the process involved with discontinuing operations would need to be "carefully managed and closely coordinated" with its business partners in the venture, citing safety and environmental concerns. The group did not specify a timeline for its exit.
Exxon operates three large offshore oil and gas fields from the base on Sakhalin Island and had preliminary plans to build an LNG export terminal there. It joins other energy majors in an exodus from Russia in response to Russian military action in Ukraine.
TotalEnergies has stopped short of a total Russian exit, saying it will stop new investments and implement EU sanctions as required "regardless of the consequences" on its economic activities in Russia. TotalEnergies reportedly holds a 19.4% stake in publicly traded natural gas producer Novatek, Russia’s largest producer of liquefied natural gas. Novatek is not currently under sanction by the US, UK or EU, but the UK has sanctioned Volga Group founder and Novatek shareholder Gennady Timchenko, who has held a 23.5% stake in Novatek, according to Bloomberg data.
"Exposure to Russia is concentrated in the hands of a few: BP and TotalEnergies have by far the largest positions of the majors," analysts at global energy consultancy Wood Mackenzie said.
BP announced on 27 February it is exiting its 19.75% interest – valued at US$14Bn – in Russian oil giant Rosneft, which reportedly has been under sanctions from the US and EU since Russia annexed Crimea in 2014. Meanwhile, Equinor’s board said it would stop new investments into Russia, and start the process of exiting Equinor’s Russian joint ventures.
On 1 March, Shell joined British oil major BP and Norway’s Equinor in exiting Russia-linked oil and gas investments in response to the Kremlin’s war on Ukraine. Shell’s interests in joint ventures with sanctioned Gazprom and related entities and its stake in the Nord Stream 2 pipeline from Russia to Germany top US$3Bn in value.
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