ExxonMobil to discontinue Russian operations at Sakhalin-I

ExxonMobil announced it will discontinue operations at Sakhalin-I. The Sakhalin-I project, a sister project to Sakhalin-II, is a consortium for production of oil and gas on Sakhalin Island in Russia, and immediately offshore. It operates three fields in the Okhotsk Sea: Chayvo, Odoptu and Arkutun-Dagi.

The consortium consists of ExxonMobil (30%), Japan’s Sakhalin Oil & Gas Development Co. Ltd. (30%), India’s ONGC Videsh Ltd. (30%), Sakhalinmorneftegas-Shelf (11.5%) and RN-Astra (8.5%). Both Sakhalinmorneftegas-Shelf and RN-Astra are Russian entities and affiliates of Russia’s Rosneft.

In 1996, the consortium completed a production-sharing agreement between the Sakhalin-I consortium, the Russian Federation and the Sakhalin government. The consortium is managed and operated by Exxon Neftegas Limited (ENL).

The U.S. energy major operates the Sakhalin-1 project on Sakhalin island in Russia on behalf of an international consortium of Japanese, Indian and Russian companies. 

“In response to recent events, we are beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture,” the U.S. energy major said.

“ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation. We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” said in a statement.

“We are deeply saddened by the loss of innocent lives and support the strong international response. We are fully complying with all sanctions.”

“As operator of Sakhalin-1, we have an obligation to ensure the safety of people, protection of the environment and integrity of operations. 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. 

Given the current situation, ExxonMobil will not invest in new developments in Russia, the company added.