2 years ago
U.S. oil giant Exxon Mobil said on Tuesday it will wind down its operations at a major liquefied natural gas export facility in eastern Russia and halt any new investments in the country.
Details: Exxon, the operator of the Sakhalin-1 LNG project that also includes Russian oil company Rosneft as a major stakeholder, will start a “carefully managed” exit, the company said in a press release. Sakhalin-1 has an export capacity of 6.2 million tons a year, and was one of the largest foreign direct investments in the country.
“As operator of Sakhalin-1, we have an obligation to ensure the safety of people, protection of the environment and integrity of operations. Our role as operator goes beyond an equity investment. The process to discontinue operations will need to be carefully managed and closely coordinated with the co-venturers in order to ensure it is executed safely.”
“Given the current situation, ExxonMobil will not invest in new developments in Russia,” the company added. Exxon owns a 30 percent stake in the project, while Japan's SODECO Consortium has a 30 percent interest and ONGC Videsh Limited, India's Oil and Natural Gas Corporation, has 20 percent interest.
Background: Exxon is one of the largest foreign investors in Russian energy operations. It’s announcement follows Europe-based energy companies BP, Shell and Equinor who said earlier in the week that they would divest from their own operations in Russia.
The energy market has created a de facto embargo of Russian energy exports after nations imposed financial sanctions in response to President Vladimir Putin ordering an invasion of Ukraine. The Biden administration and European allies kicked the country off the SWIFT bank messaging system, sending the ruble into a tailspin and making energy traders wary of dealing in Russian crude oil and natural gas.
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