HOUSTON: Exxon Mobil said it would exit Russia oil and gas operations that it has valued at more than $4 billion and halt new investment as a result of Moscow’s invasion of Ukraine.
The decision will see Exxon pull out of managing large oil and gas production facilities on Sakhalin Island in Russia’s Far East, and puts the fate of a proposed multi-billion dollar liquefied natural gas (LNG) facility there in doubt.
“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” the company said in a statement critical of the intensifying military attacks.
Its planned exit follows dozens of other Western companies ranging from Apple and Boeing to BP, Shell and Norway’s Equinor that have halted business or announced plans to abandon their Russia operations.
Exxon did not provide a timetable for its exit, nor comment on potential asset writedowns. Its Russia assets were valued at $4.055 billion in its latest annual report filed in February. Earlier, Exxon began removing US employees from Russia. The number of staff being evacuated was unclear. The company sent a plane to Sakhalin Island to retrieve staff.
READ MORE: After BP, Shell to exit Russia amid Ukraine invasion
Exxon operates three large offshore oil and gas fields with operations based on Sakhalin Island on behalf of a consortium of Japanese, Indian and Russian companies that included Russia’s Rosneft. The group had been advancing plans to add a LNG export terminal at the site.
The company, which has been developing its Russian oil and gas fields since 1995, had come under pressure to cut its ties with Russia over Moscow’s invasion of Ukraine. The Sakhalin facilities, which Exxon has operated since production began in 2005, represents one of the largest single direct investments in Russia. The operation recently has pumped about 220,000 barrels per day of oil.
Japan’s Sakhalin Oil and Gas Development, which owns a 30% stake in the Sakhalin-1 project, is trying to confirm details of Exxon’s announcement, a spokesperson said, adding that it will keep an eye on the Russia-Ukraine situation and decide what to do in the future.
State-backed oil producer Japan Petroleum Exploration (Japex), which owns 15.285% in SODECO, is also checking details of the Exxon’s announcement and will talk to its partners to decide a future plan.
