Exxon to exit Sakhalin-1 LNG project in Russia, make no new investments

Mar. 01, 2022 8:00 PM ET
Exxon Mobil Corporation (XOM)RNFTF
By: Carl Surran, SeekingAlpha News Editor

Exxon Mobil (NYSE:XOM) says it is beginning the process to discontinue operations at the Sakhalin-1 LNG venture in Russia and devising steps to exit the project, and will not invest in new developments in the country, in response to Russia's invasion of Ukraine.

"Our role as operator goes beyond an equity investment," Exxon said. "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."

Exxon owns a 30% stake in the project, alongside Russia's Rosneft (OTCPK:RNFTF), Japan's Sodeco and India's ONGC Videsh; Sakhalin-1 produced nearly 83M barrels of oil and condensate and more than 12B cm of natural and associated gas in 2021.

Earlier reports had said Exxon was removing U.S. employees working in Russia, although the vast majority of its 1,000-person workforce in the country is comprised of Russian citizens.

Exxon, which has been developing Russian oil and gas fields since 1995, came under pressure to cut ties with Russia after BP, Shell and others disclosed plans to exit Russian investments or halt operations.

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10 replies (most recent on top)

I heard Darin say we are safely shutting in Sak 1 operations and he doesn't want to predict the future. Much different message than the media headline hype.

I read that we are leaving operations. Have not seen that we are giving up stake.
Assets are quite high and I don’t writing them off

Clearly RFE LNG will never see light of day as an EM project. I agree with @gmc - creating steps toward a Sak-1 exit plan is much different from getting out. Wordsmithing at its best.

D1psh1ts - The announcement about EM not investing anymore in Russia was specifically referring to the RFE LNG project we have been working on up to preFEED for decades. It doesn't make the hurdle (this means ROCE too low). EM is using a decision not to proceed anyway to appear they are joining the bandwagon against Russia. The planned RFE site was not on Sakhalin, but, right next to it on the mainland.

Sakhalin 1 LNG was an EM project that was never fully funded or executed. May not be funded ever.

Sakhalin 2 LNG does exist but that is Shell, not EM.

Ignorance

Sakhalin 1 LNG?????

If you are ignorant, please refrain from writing about the topic.

@ruc-the one with the g-ns invading a free nation is causing the suffering. Unprovoked he invated another nation and ki---d free citizens.. Pretty far stretch to blame anyone but Russia.

Haha Good timing. Russian Far East LNG never made the hurdle anyway. Spin doctors doing their job.

I’m happy we are standing with Ukraine and against Putin. My heart is breaking though for all of our colleagues working on Sakhalin. I’m sure none of them are happy with what Putin has done either and will be suffering the consequences of his decisions along with all of the innocent people in Ukraine. I hope Exxon is able to help the Russians find jobs elsewhere in the company similar to the exit from Venezuela.

Bravo! Was there ever a plan for new investment? What is the timeline to "discontinue operations"? LOL

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Exxon to exit Sakhalin-1 LNG project in Russia, make no new investments

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