ExxonMobil to halt oil production in Russia, suspend new investments there amid war with Ukraine
Energy companies have been under greater pressure to pull out or cease operations in Russia
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ExxonMobil on Tuesday said it will wind down operations at a multibillion-dollar oil and gas project in Russia and halt any new investments in the country.
The Sakhalin-1 project, a large oil and gas production venture on Sakhalin Island in far eastern Russia, is one of the largest single foreign direct investments in the country.
Exxon said it will start a "carefully managed" exit of Sakhalin-1, the company stated in a news release.
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ExxonMobil headquarters in Irving, Texas. (iStock / iStock)
"As operator of Sakhalin-1, we have an obligation to ensure the safety of people, protection of the environment and integrity of operations," the company said. "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."
The U.S. oil giant currently holds a 30% stake in the Sakhalin-1 project, alongside Japan's SODECO consortium, India's ONGC Videsh Ltd., and two affiliates of Russian state-controlled oil producer Rosneft. Sakhalin-1 has an export capacity of 6.2 million tons a year, Politico reported.
"Given the current situation, ExxonMobil will not invest in new developments in Russia," the company added.
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The company provided no timetable on when it planned to halt production. Energy companies have been under greater pressure to pull out or cease operations in Russia following President Vladimir Putin's invasion of neighboring Ukraine.
British BP PLC, Shell, and Norway's Equinor ASA previously said they planned to exit investments in Russia.
Russian President Vladimir Putin in Moscow, Feb. 1, 2022. (Associated Press / AP Newsroom)
Exxon has already started removing employees who are U.S. citizens from Russia, Reuters reported earlier this week. The company employed more than 1,000 people across Russia last year.
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"ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation," the company said. "We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people."
A Polish border guard assists refugees from Ukraine as they arrive to Poland at the Korczowa border crossing, Feb. 26, 2022. (Associated Press / AP Newsroom)
In the news release, Exxon added that it was "saddened" by the loss of innocent lives during the Russian invasion of Ukraine. The company noted it supported the "strong international response" to the conflict.
Exxon has operated the Sakhalin facilities since production began in 2005. The company has been developing its Russian oil and gas fields since 1995.
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Exxon had also been advancing plans to add a liquefied natural gas export terminal at the site, Reuters reported.