Exxon leaves Russia, leaving $4 billion in assets

The ExxonMobil logo at the Rio Oil and Gas Exhibition and Conference in Rio de Janeiro, Brazil, September 24, 2018. REUTERS/Sergio Moraes

HOUSTON, March 2 (Reuters) – ExxonMobil (XOM.N) On Tuesday, it said it would exit Russian oil and gas operations valued at more than $4 billion and halt new investments as a result of Moscow’s invasion of Ukraine.

The decision would see Exxon withdraw from managing large oil and gas production facilities on Sakhalin Island in Russia’s Far East, and put the fate of a proposed multi-billion dollar LNG facility in doubt.

“We deplore the Russian military action that violates the territorial integrity of Ukraine and puts its people at risk,” the company said in a statement criticizing the intensification of military attacks.

Its planned exit follows dozens of other Western companies, ranging from Apple (AAPL.O) and Boeing (ban) To BP PLC, Shell and Equinor ASA of Norway (EQNR.OL) which has suspended its operations or announced plans to abandon its operations in Russia.

Exxon, which is set to meet with Wall Street analysts on Wednesday, did not provide a timetable for its exit, nor did it comment on potential asset writedowns. Its assets in Russia were valued at $4.055 billion in its latest annual report in February.

Earlier, Exxon began removing US employees from Russia, two people familiar with the matter said. It was not clear how many employees were being evacuated. One person said that the company sent a plane to Sakhalin Island to retrieve employees.

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 includes Russia’s Rosneft. (ROSN.MM). The group was submitting plans to add an on-site LNG export terminal.

said Anish Kapadia, Principal at Energy and Consultants Mining Researcher Pallissy.

The company, which has been developing Russian oil and gas fields since 1995, has come under pressure to sever ties with Russia due to Moscow’s invasion of Ukraine. Russia describes its actions in Ukraine as a “special operation.”

The Sakhalin facility, which Exxon has operated since starting production in 2005, represents one of the largest single direct investments in Russia, according to a project description on Exxon’s website. The operation recently pumped about 220,000 barrels of oil per day.

India’s ONGC Videsh, which owns 20% of the Sakhalin-1 project, said the partners will decide over the next few weeks how to continue operating the project after exit, the Indian company told Reuters in an emailed statement.

Rosneft owns a 20% stake in the project.

The offshore investment arm of India’s largest oil and natural gas exploration company (ONGC.NS) It also said it did not see “any immediate impact” on the operation of the project due to Exxon’s decision.

A spokesman for Sakhalin Oil and Gas Development Corporation (Sodeco), which owns a 30% stake in the Sakhalin-1 project, said it was trying to confirm details of Exxon’s announcement, adding that it would monitor the situation between Russia and Ukraine. Decide what to do in the future.

Japan State-Backed Petroleum Exploration Corporation (JAPEX) (1662 t)which owns 15.285% in SODECO, is also checking Exxon’s announcement details and will speak with its partners to determine a future plan, a Japex spokesperson said.

(Sabrina Valley Reporting) Additional reporting by Gary McWilliams, Yuka Obayashi and Niddy Verma; Editing by Kenneth Maxwell, Richard Boleyn and Jonathan Otis

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