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Exxon to exit Russia, suspend further investments

The decision includes operations at a large oil and gas production project on Sakhalin Island in Russia's Far East. British BP PLC , Shell and Norway's Equinor ASA have previously disclosed plans to abandon Russia operations.

March 02, 2022 / 07:07 AM IST

Exxon Mobil will exit Russia operations, including oil production fields, it said on Tuesday, becoming the latest major Western energy company to quit the oil-rich country following Moscow's invasion of Ukraine.

The decision includes operations at a large oil and gas production project on Sakhalin Island in Russia's Far East. British BP PLC , Shell and Norway's Equinor ASA have previously disclosed plans to abandon Russia operations.


"Given the current situation, Exxon Mobil will not invest in new developments in Russia," the company said in a statement.


Exxon did not provide a timetable for the exit, nor comment on any potential asset writedowns.


The company condemned Russia's attack and said it supports the people of Ukraine.


"We deplore Russia's military action that violates the territorial integrity of Ukraine and endangers its people," Exxon said.


Exxon has begun removing employees who are U.S. citizens from Russia, Reuters reported earlier, based on two people familiar with the matter.


Exxon last year employed more than 1,000 people across Russia with offices in Moscow, St. Petersburg, Yekaterinburg and Yuzhno-Sakhalinst, according to its website.


The number of expatriate staff being evacuated was unclear on Tuesday. The company sent a plane to Sakhalin Island to retrieve staff, one of the people familiar with the matter said.


Exxon operates three large offshore oil and gas fields with operations based on Sakhalin Island on behalf of an international consortium of Japanese, Indian and Russian companies. It had been advancing plans to add a liquefied natural gas export terminal at the site.


"Exxon's Russian business is relatively small in the context of its wider enterprise, so it does not have the same significance as it has to BP or TotalEnergies, if it were to abandon its Russian assets," said Anish Kapadia, a director at energy and mining researcher Pallissy Advisors.


The company, which has been developing its Russian oil and gas fields since 1995, had come under pressure to cut its ties with Russia over Moscow's invasion of Ukraine. Russia calls its actions in Ukraine a "special operation".

The Sakhalin facilities, which Exxon has operated since production began in 2005, represents one of the largest single direct investments in Russia, according to a project description on Exxon's website. The operation has pumped up to 300,000 barrels per day of oil and gas.

Reuters
first published: Mar 2, 2022 07:07 am