Exxon exits $4 billion Russia investment over Ukraine attack

Posted at 10:06 AM, Mar 02, 2022
and last updated 2022-03-02 12:17:39-05

ExxonMobil is closing its operations in Russia, joining fellow energy giants BP, Equinor and Shell in pulling back from the world's third-largest oil producer after its invasion of Ukraine.

Exxon late Wednesday announced it was exiting 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 dropping new investments in Russia, the company said.

"ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation. We deplore Russia's military action that violates the territorial integrity of Ukraine and endangers its people," the company said in its announcement. Exxon did not specify a time line for withdrawing from its Russia operations.

Exxon's Russia holdings were worth more than $4 billion as of 2021, according to its latest annual report. The Sakhalin-1 project, which Exxon has managed since 2005, employs 700 Russians and has generated $16 billion for the Russian government, according to Exxon Earlier, Exxon began evacuating its U.S. staff from Russia, Reuters reported.

Although Russia's oil and gas sector has so far escaped Western sanctions, other major fossil fuel companies are at least temporarily scaling down their business there. Shell on Monday said it was exiting its ventures with Russian state energy company Gazprom, dropping roughly $3 billion of assets. BP — Russia's largest foreign investor — said last week it would drop stake in Rosneft, Russia's national oil and gas company, at a cost of up to $25 billion. Norway's Equinor is also leaving its $1.2 billion investment in Russia.

Russia is the second-largest gas producer and third-largest oil producer in the world, with about 40% of its federal budget coming from fossil-fuel exports, and its invasion of Ukraine is slamming 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.