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ExxonMobil Exits Russia With ‘Unilateral Termination’ of Sakhalin-1 Assets

Updated: Oct. 18, 2022

American oil giant ExxonMobil has completed its exit from the Russian market after President Vladimir Putin ordered the expropriation of its assets, the company said.

ExxonMobil had been in negotiations with the Russian authorities to sell its more than $4 billion in assets — including its largest Russian investment, a 30% stake in the Sakhalin-1 oilfield in the Russian Far East — since March.

“I can confirm that we got out safely,” a company representative told Reuters on Monday.

“By two decrees, the Russian government unilaterally terminated our interest in Sakhalin-1 and the project was transferred to a Russian operator,” the ExxonMobil spokesperson said.

Sakhalin-1’s foreign investors will have one month to apply for shares in the new entity operated by state-run oil giant Rosneft.

The Exxon spokesperson did not say whether the company had received compensation for its assets, nor did they comment on whether the company would seek to challenge the seizure through international courts.

ExxonMobil had reduced its output on Sakhalin-1 by July, limiting volumes to the amount needed to sustain Khabarovsk and Vladivostok, the two largest cities in Russia’s Far East.

Other Western energy companies such as BP, TotalEnergies, Equinor, and Shell, have all transferred their assets in Russia to their local partners or simply abandoned their operations in the country altogether following the invasion of Ukraine.