ExxonMobil will stop oil production in Russia, will stop new investments there amid the war with Ukraine

Business News / By Ashley Cornell, email: [email protected] / March 2, 2022

FOX Business presenter Stuart Varney says Biden “has an ideal opportunity to increase pressure” as the Russian invasion continues.

ExxonMobil said on Tuesday that it would suspend operations on a multibillion-dollar oil and gas project in Russia and suspend any new investment in the country.

The Sakhalin-1 project, a large oil and gas company on Sakhalin Island in far eastern Russia, is one of the country’s largest single foreign direct investments.

Exxon said it would launch a “carefully managed” exit from Sakhalin-1, the company said in a press release.

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ExxonMobil is headquartered in Irving, Texas. (iStock / iStock)

“As an operator of Sakhalin-1, we have an obligation to ensure the safety of people, the environment and the integrity of operations,” the company said. “Our role as an operator goes beyond capital investment. The process of terminating operations will need to be carefully managed and closely coordinated with partners to ensure that it is carried out safely.”

The American oil giant currently owns a 30% stake in the Sakhalin-1 project, together with the Japanese consortium SODECO, Indian ONGC Videsh Ltd. and two subsidiaries of Russian state oil producer Rosneft. Sakhalin-1 has an export capacity of 6.2 million tons per 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 did not provide a schedule for when it plans to stop production. Energy companies are under greater pressure to withdraw or close down in Russia following President Vladimir Putin’s invasion of neighboring Ukraine.

Britain’s BP PLC, Shell and Norway’s Equinor ASA have previously said they plan to abandon their investments in Russia.

Russian President Vladimir Putin in Moscow, February 1, 2022 (Associated Press / AP Newsroom)

Exxon has already begun removing US nationals from Russia, Reuters reported earlier this week. The company hired 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 define their own future as a nation,” the company said. “We condemn Russia’s military actions, which violate Ukraine’s territorial integrity and threaten its people.”

A Polish border guard helps refugees from Ukraine when they arrive in Poland at the Korchova border checkpoint, February 26, 2022. (Associated Press / AP Newsroom)

In a press release, Exxon added that it was “saddened” by the loss of innocent lives during the Russian invasion of Ukraine. The company said it supported a “strong international response” to the conflict.

Exxon has been managing Sakhalin’s facilities since production began in 2005. The company has been developing its Russian oil and gas fields since 1995.

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Exxon is also developing plans to add a liquefied natural gas export terminal to the site, Reuters reported.