A recent decree signed by Russian President Vladimir Putin could pave the way for ExxonMobil to reclaim its 30% operator share in the Sakhalin-1 oil and gas project.
This development emerges as Putin meets with US President Donald Trump in Alaska, with discussions on investment opportunities and the Ukraine peace process on the agenda, reported Reuters.
The decree, issued on a Friday, follows an earlier one from October 2022, which saw the Russian Government seize control of the Sakhalin-1 project.
Exxon, which had previously divested from its Russian interests, including the Sakhalin-1 stake, due to the conflict in Ukraine, faced a $4.6bn impairment charge as a result.
The re-entry of Western investors like Exxon into Russian projects is complicated by the extensive sanctions imposed by the US and EU.
The European Commission announced its 18th sanctions package against Russia in July, aimed at reducing Russia's energy income and supporting EU objectives for peace in Ukraine.
These sanctions would need to be lifted to enable investment, a prospect currently being explored by Trump's administration in considering potential progress in peace talks.
Notably, the Sakhalin-1 project has not been directly targeted by the US sanctions against the Russian energy sector.
According to the decree, foreign shareholders interested in regaining their shares must contribute to efforts to lift Western sanctions. Additionally, they are required to secure contracts for the supply of necessary foreign-made equipment and transfer funds to the project's accounts.
The Russian Government has extended the sale period for Exxon's unclaimed stake until 2026, as per a decree from December 2024.
Rosneft subsidiary Sakhalinmorneftegaz-shelf has been designated as the new operator, with the Russian Government retaining the authority to determine foreign investors' ownership rights.
While Exxon has exited its stake, other international partners such as India's ONGC Videsh and Japan's SODECO have been allowed to maintain their investments.
"Russian decree may enable ExxonMobil to reclaim share in Sakhalin-1" was originally created and published by Offshore Technology, a GlobalData owned brand.
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