ExxonMobil vows to sue Russia if it blocks its Sakhalin-1 exit

ExxonMobil has warned Russia it will sue the federal government unless Moscow lets the US major withdraw from the Sakhalin-1 oil and gas project in the country's Far East, the Wall Street Journal reported on August 30.

Russian president Vladimir Putin signed a decree earlier this month preventing investors in so-called "unfriendly countries" from selling their shares in certain strategic enterprises until the end of the year, including major oil and gas projects.

A spokesperson for ExxonMobil said the company had recently sent a notice of disagreement to the Russian government – a required step to resolve a conflict before litigation can start. Sources told the WSJ that ExxonMobil is already preparing to file a lawsuit, as the company believes it is unlikely that the issue will be resolved before the unspecified deadline.

ExxonMobil serves as operator of the Sakhalin-1 project with a 30% interest. Its Russian partner Rosneft, which has a 20% stake, complained earlier this month that production at Sakhalin-1 had practically ceased, and that no oil was being shipped out. Japanese consortium SODECO owns a further 30%, while India's ONGC Videsh has 20%.

Sakhalin-1 is one of the oldest international ventures in Russia's oil and gas sector. ExxonMobil formed a consortium to develop the project in 1996, and first oil was achieved in 2003. Its fields, located off the east coast of Sakhalin Island, flowed 220,000 barrels/day of crude last year.

In another development in Russia's oil industry, TotalEnergies confirmed on August 26 that it had sold a 49% stake in the Terneftegaz gas project in west Siberia to its partner Novatek.