Russian President Vladimir Putin has extended the deadline for the sale of ExxonMobil’s stake in the Sakhalin‑1 oil and gas project by one year, giving the US major until January 1, 2027, to complete an exit deal, Reuters reported.
The move potentially opens more room for negotiations over compensation after Exxon booked a multi‑billion‑dollar hit on its Russian assets in 2022. Exxon took a $4.6 billion impairment charge on its 30% operating stake in Sakhalin‑1 in April 2022, after deciding to withdraw from Russia following the start of Moscow’s conflict with Ukraine, according to Reuters.
The project, located off Russia’s Pacific coast, had been one of the country’s flagship developments for international oil companies.
The new decree is expected to support Exxon’s efforts to recover at least part of its losses from the project. In August, Putin signed a separate decree allowing foreign investors to regain shares in Sakhalin‑1, signaling a more flexible approach to the participation of former partners.
In September, Exxon and Russian state‑controlled producer Rosneft signed a non‑binding initial agreement that outlines a possible pathway for Exxon to recoup some of the value it lost when exiting the venture.
The understanding was described as an early step towards repairing commercial ties, but analysts cited by Reuters expect limited progress until there is a peace settlement in Ukraine and Western sanctions on Russia are eased.
Russia has repeatedly said it would welcome back international companies that left the country. Alongside Exxon and Rosneft, India’s ONGC Videsh and Japan’s SODECO were long‑standing investor partners in Sakhalin‑1. The Russian government allowed both companies to retain their equity positions in the project, in contrast to Exxon’s decision to exit.
Earlier in December, three sources told Reuters that ONGC Videsh had agreed to pay into a Sakhalin‑1 abandonment fund to keep its 20% stake. The arrangement highlights how some Asian partners are seeking to maintain access to Russian upstream production despite the risks of geopolitical tensions and sanctions, according to Reuters.
ExxonMobil is one of the largest US-based oil and gas producers and one of the world’s biggest publicly traded energy companies, active across the value chain from exploration and production to refining and fuel retailing.
The company has operated in Russia for decades and was the long-time operator of Sakhalin‑1 under a production-sharing agreement signed in the 1990s, before completing its exit from the Russian market in 2022 following the invasion of Ukraine.
