Exxon Exits Russia Oil Project Without Getting Paid A Single Cent

Exxon Mobil Corp. said that it has left Russia completely after President Vladimir Putin expropriated its properties following seven months of discussions over an orderly transfer of its 30% stake in a major oil project, Sabrina Valle reported for Reuters.

Photo Insert: Exxon had valued its Russia holdings at more than $4 billion.

Exxon did not say if it received any compensation for the assets, which it had valued at more than $4 billion. An Exxon spokesperson declined to comment on whether it will proceed to contest the seizure through an international arbitration process, a possibility flagged in August.

Its departure illustrates the clash between the West and Russia over energy following Moscow's invasion of Ukraine in late February and threats of using nuclear weapons against the country and its supporters. BP, TotalEnergies, Equinor, and Shell have all transferred properties to Russian partners or left operations behind.

"We made every effort to engage with the Russian government and other stakeholders," the Exxon spokesperson said. The company said it "safely exited" Russia after the government earlier this month "unilaterally terminated" its interests in the Sakhalin-1 oil and gas project, its largest in the country.

Exxon has been trying to relinquish operation of Sakhalin-1 since March 1, when it announced it would abandon all of its more than $4 billion in assets, leaving open the possibility to sell Sakhalin-1.

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It said it would "closely coordinate" the transfer of operation with its partners - Russian company Rosneft, India's ONGC Videsh (ONVI.NS) and Japan's SODECO to ensure it would be done in a secure way.

In April, Exxon disclosed a $3.4 billion write-down on the Russia exit and this month signaled a third-quarter $600 million impairment charge for unidentified assets.

Exxon had valued its Russia holdings at more than $4 billion.

On Oct. 7, Putin seized Exxon shares in the oil production joint venture and transferred them to a government-controlled company.

In August, Putin signed a first decree that Exxon said made a secure and environmentally safe exit from Sakhalin-1 difficult. The US producer reacted to August's decree by issuing a "note of difference," a legal step before arbitration.

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