(Bloomberg) — Exxon Mobil Corp. plans to hand over its stake in a Russian oil development to Kremlin-controlled Rosneft PJSC and other partners as sanctions make it harder to operate in the country.
Just hours after announcing plans to abandon its Russian investments, Exxon Chief Executive Officer Darren Woods told analysts that banking sanctions imposed in response to the invasion of Ukraine will “degrade” the oil giant’s ability to operate the Sakhalin-1 development.
Woods said the company “deplores” Russia’s military incursion into its smaller neighbor and reiterated that Exxon won’t make any new investments in the country.
His first remarks on the war in Ukraine came 55 minutes into a morning-long virtual presentation to Wall Street and were preceded by detailed discussions of carbon capture and deepwater oil exploration.
Woods also said he anticipated a “cessation” at the Sakhalin-1 project in the Russian Far East, but it wasn’t clear whether he was referring to the company’s planned exit from participation or an actual halt to oil output.
Exxon, Rosneft and their Japanese and Indian partners have been harvesting crude from a cluster of subsea fields off the coast of Sakhalin Island since 2005. Exxon valued the asset at $4 billion on its balance sheet, according to company documents.