By Alice Seeley
ExxonMobil announced on March 1 that it will end its decades-long involvement in Russia because of the country’s invasion of Ukraine. Exxon is now the latest Western oil company to announce that it is leaving Russia.
“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” Exxon stated.
Exxon operated in Russia for a quarter-century but decreased operations there in 2014 after Russia invaded and annexed Crimea, a part of Ukraine.
Exxon currently holds a 30% stake in three major oil and gas production facilities on Sakhalin Island off Russia’s eastern coast and has served as an operator of the facilities since 2005. These facilities produce 220,000 barrels of oil per day and have produced more than $16 billion in taxes, royalties, and other payments to the Russian government. These facilities are one of the largest single foreign direct investments in Russia.
As the market for Russian assets has quickly diminished, Exxon will have difficulty selling its 30% stake, creating a very complicated situation for Exxon’s exit from Russia. However, Exxon said it will discontinue the operations and leave the facilities completely. Not only is Exxon ending its cooperation with the facilities, but Exxon also stated that “given the current situation, ExxonMobil will not invest in any new developments in Russia.
Currently, Exxon has around a 1,000 person workforce in Russia and is assisting their employees in leaving the country.
Exxon’s announcement came after BP, Shell, and TotalEnergies announced their decision to end operations in Russia.
