ExxonMobil closes operations in Russia, joining other energy giants BP, Equinor and Shell in withdrawing from the world’s third-largest oil producer after invading Ukraine.
Late Wednesday, Exxon announced it was leaving the Sakhalin-1 project, an oil and gas operation on Sakhalin Island in Russia’s Far East that the company operates on behalf of an international consortium. Exxon is also refusing new investments in Russia, the company said.
“ExxonMobil supports the people of Ukraine as they seek to defend their freedom and define their own future as a nation. We deplore Russia’s military action, which violates Ukraine’s territorial integrity and threatens its people,” the company said in a statement. Exxon did not specify a timeline for withdrawal from its operations in Russia.
Exxon’s holdings in Russia are estimated at more than $ 4 billion by 2021, according to the latest annual report. The Sakhalin-1 project, which Exxon has run since 2005, employs 700 Russians and has generated $ 16 billion for the Russian government, according to Exxon.
Although Russia’s oil and gas sector has so far avoided Western sanctions, other major fossil fuel companies are at least temporarily downsizing there.
Shell said Monday that it is abandoning its ventures with Russia’s state-owned energy company Gazprom, leaving behind assets of about $ 3 billion. BP, Russia’s largest foreign investor, said last week it would give up a nearly 20 percent stake in Rosneft, Russia’s national oil and gas company, worth up to $ 25 billion. Norwegian Equinor is also abandoning its $ 1.2 billion investment in Russia.
Russia is the world’s second-largest gas producer and the world’s third-largest oil producer, with about 40 percent of its federal budget coming from fossil fuel exports and its invasion of Ukraine hitting global energy markets. The price of Brent crude oil, the international benchmark, rose to $ 110 a barrel on Wednesday, its highest level since the summer of 2014.