The company announced it will stop managing the huge oil and gas production sites on Sakhalin Island in the east of Russia. It comes after several other energy giants, including British companies Shell and BP, have also slashed ties with Russia. Exxon said in a statement: “We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people.
Now, plans for a new major liquified natural gas (LNG) plant on the island look to be in jeopardy.
Another massive LNG project on the island, Sakhalin-2, was dealt a huge blow well Shell pulled out of the joint-venture.
The energy giant had a 27.5 percent stake in the project.
But this is just one of several projects that are in a crisis as billions of funds slip out of Russia’s grip.
Shell is also ditching its 50 percent stake in the Salym Petroleum Development and the Gydan energy venture.
Exxon, while not holding as large a stake in Russia’s energy empire, does operate three large offshore oil and gas fields.
It also planned to add a new LNG export terminal to the site.
Anish Kapadia, from Pallissy Advisors, said: “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.”
But given that it is joining a long list of companies that have slashed ties with Russia, this will no doubt come at a huge cost to Russia’s energy sector.
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Shell’s chief executive officer, Ben van Beurden, said in a statement: “We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security.
“Our decision to exit is one we take with conviction. We cannot — and we will not — stand by. Our immediate focus is the safety of our people in Ukraine and supporting our people in Russia.”
This also comes as Europe looks to slash its dependency on Russian gas.
The bloc is largely reliant on Russia for its gas, with its exports accounting for 40 percent of its total supplies.
And Russia’s Ukraine invasion has sparked fears its gas could get slashed in response to sanctions slapped down on the energy sector.
The EU’s Energy Commissioner Kadri Simson, has described the bloc’s energy situation as “tense”.
But she has claimed that EU would be able to get through the winter even if Russia slashes all its supplies.