Exxon announced late Wednesday that it would be ending the Sakhalin-1 Project. This is an oil and gas operation located on Sakhalin Island, Russia’s Far East. The company manages the project on behalf of an international consortium. The company also announced that Exxon will be reducing its Russian investments.
“ExxonMobil supports Ukraine’s people in their struggle for freedom and their future. In its announcement, ExxonMobil stated that it regretted Russia’s military actions that violated the territorial integrity and endangered the people of Ukraine. Exxon didn’t specify a timeline for its withdrawal from Russia operations.
According to Exxon’s latest report, Russia holdings are valued at more that $4 billion by 2021. Exxon’s Sakhalin-1 project has been managed by Exxon since 2005 and has produced $16 billion in revenue for Russia. Exxon reported .
While Russia’s oil-and-gas sector has not been subject to Western sanctions, major fossil fuel companies are temporarily scaling back their operations there.
Shell, which had a Monday statement that it was ending its joint ventures with Gazprom (Russia’s state-owned energy company) left behind approximately $3 billion in assets. BP — Russia’s largest foreign investor — stated last Monday that it would sell its almost 20% stake in Rosneft (Russia’s national oil-and-gas company), at a cost up to 25 billion. Equinor, Norway’s largest foreign investor, is also leaving Russia’s $1.2 billion investment.
Russia is the world’s second largest oil producer and gas producer, accounting for around 40% of the federal budget. Its invasion of Ukraine is also causing havoc in global energy markets. Brent crude oil, which is the international benchmark for oil prices, rose to $110 per barrel on Wednesday. This was its highest price since summer 2014.
