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Russia decree opens door for Exxon return to Sakhalin-1 project

marketscreener.com -- Friday, August 15, 2025, 4:28:26 PM Eastern Daylight Time
Categories: U.S.–Russia Relations, Foreign Policy & International Relations, Presidential Campaigns
Russia decree opens door for Exxon return to Sakhalin-1 project

MOSCOW (Reuters) -Russian President Vladimir Putin on Friday signed a decree that could allow foreign investors, including top U.S. oil major Exxon Mobil, to regain shares in the Sakhalin-1 oil and gas project.

The signing of the decree comes on the day Russian president Vladimir Putin meets Donald Trump in Alaska for a summit where opportunities for investment and business collaboration will be on the agenda, alongside talks to find peace in Ukraine.

Friday's decree was published as a follow-up to one Putin signed in October 2022, which ordered the seizure of the Sakhalin-1 project.

Exxon previously held a 30% operator share in the lucrative project, and is the only non-Russian investor to have quit its stake.

Exxon did not immediately reply to Reuters request for comment.

The path to Western investment returning to Russia is unclear given the U.S. and European Union would need to lift far-reaching sanctions to facilitate investment. Companies who might wish to return, having spent significant amounts of money to exit the country three years ago, also face high barriers put up by the Russian government.

Trump and his team have considered what sanctions they may be able to lift quickly in the case of progress in talks. Sakhalin-1 has to date not been directly designated under extensive U.S. sanctions on Russian energy.

The decree stipulates that foreign shareholders must undertake actions to support the lifting of Western sanctions if they want to regain their share. They must also conclude contracts for supplies of necessary foreign-made equipment to the project, and transfer funds to Sakhalin-1 project accounts.

Exxon took an impairment charge of $4.6 billion to exit its Russian business after Moscow sent troops into Ukraine in February 2022.

In December 2024, Putin signed a decree extending the sale period for the unclaimed Exxon stake in Sakhalin-1 until 2026.

The October 2022 decree established Rosneft subsidiary Sakhalinmorneftegaz-shelf as the new operator, allowing the Russian government to decide foreign investors' ownership rights in Sakhalin-1.

Alongside Exxon, Russian company Rosneft, India's ONGC Videsh and Japan's SODECO were partner investors. The Russian government allowed both ONGC Videsh and SODECO to keep their stakes.

(Reporting by Olesya Astakhova; Writing by Robert Harvey; Editing by Nina Chestney, Simon Webb and Rosalba O'Brien)

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Opinion:

The recent developments surrounding the Sakhalin-1 oil and gas project in Russia highlight a complex interplay between geopolitics, corporate interests, and the ongoing struggle for energy resources in a world grappling with the consequences of climate change and war. President Vladimir Putin's decree to potentially allow Exxon Mobil back into the project raises critical questions about the motivations behind such moves and the broader implications for international relations, particularly regarding U.S.-Russia dynamics. This moment serves as a reminder that energy resources are not merely commodities but are deeply intertwined with national sovereignty, historical grievances, and the legacies of colonial exploitation.

Historically, the Sakhalin-1 project has been a microcosm of the tensions between Western economic interests and Russian nationalism. The project, which began in the 1990s following the dissolution of the Soviet Union, was emblematic of a time when foreign investment was welcomed in a country eager to modernize its economy. However, the annexation of Crimea in 2014 and the ongoing conflict in Ukraine have led to a reevaluation of these relationships. Exxon's departure from Sakhalin-1 in 2022, coupled with the significant financial losses incurred, exemplifies how geopolitical conflicts can directly impact corporate strategies, forcing companies to navigate a treacherous landscape of sanctions and public perception.

The potential return of Exxon to Sakhalin-1 raises pertinent questions about the morality of profiting from conflict. As the world faces escalating climate crises, the push for fossil fuel extraction seems increasingly at odds with sustainable development and social justice goals. In this context, the pursuit of profits in a war-torn country like Ukraine brings to the forefront issues of complicity in human rights violations. Critics may argue that returning to Sakhalin-1 could be seen as tacit support for a regime that has been accused of undermining democratic values and engaging in aggressive military actions. This dynamic presents an opportunity for advocates of social justice to challenge the ethics of business decisions made in the context of armed conflict and national aggression.

Furthermore, the involvement of the U.S. government in discussions about lifting sanctions as a bargaining chip for peace negotiations raises concerns about the prioritization of corporate interests over humanitarian considerations. The potential easing of sanctions for companies like Exxon is indicative of a broader trend where economic diplomacy is favored over genuine efforts to address the root causes of conflict. This reflects a historical pattern where economic incentives take precedence over the moral imperatives of justice and accountability. For those advocating for a more equitable global order, this moment underscores the need for a critical examination of the influence of corporate lobbying on foreign policy decisions.

Finally, the Sakhalin-1 case reminds us of the importance of amplifying voices that advocate for sustainable energy practices and the transition away from fossil fuels altogether. The reinvigoration of interests in projects like Sakhalin-1 must be met with calls for accountability and a commitment to renewable energy development. As nations grapple with the repercussions of climate change, the lessons from historical energy extraction practices must inform contemporary policy discussions. Advocating for a global shift towards renewable energy not only addresses climate justice but also diminishes the power dynamics that allow for exploitation in conflict zones.

In summary, the potential return of Exxon to the Sakhalin-1 project encapsulates a myriad of issues concerning geopolitical tensions, corporate ethics, and the ongoing struggle for social justice. As discussions of sanctions and investment take center stage, it is imperative to critically engage with the implications of such actions and push for a more equitable and sustainable energy future. The interplay of energy resources, historical grievances, and the quest for justice remains a pivotal theme as we navigate the complexities of our interconnected world.

Action:

The recent developments surrounding the Sakhalin-1 oil and gas project spotlight the complex interplay of geopolitics, energy independence, and corporate interests. With President Vladimir Putin's decree allowing the potential return of Exxon Mobil to a project that it exited in the wake of the Russian invasion of Ukraine, it raises important questions about the role of foreign investment in a nation under sanctions. This move not only seeks to restore the economic symbiosis that existed prior to the conflict but also highlights the precarious balancing act that the U.S. and its allies must navigate in their ongoing confrontation with Russia.

Historically, the Sakhalin-1 project has been emblematic of foreign investment in Russian energy, showcasing how international oil companies have engaged with Russia's vast resources. Exxon Mobil, once a key player, decided to withdraw in response to the geopolitical crisis, incurring significant financial losses. This decision was reflective of a broader trend among Western companies reassessing their ties to Russian markets amidst escalating sanctions and international condemnation. However, as the sanctions landscape shifts, the potential for re-engagement raises ethical questions about the implications of economic collaboration with a regime that has shown itself willing to flout international norms.

For Americans and progressives seeking to understand this situation, it is critical to recognize the interconnectedness of global energy markets and the potential consequences of re-engagement with Russia. While the prospect of U.S. corporations returning to Russia might appeal to those who prioritize economic gain, it risks undermining the very principles of human rights and democratic governance that many Americans hold dear. Engaging with Russia on such projects could inadvertently legitimize a government that continues to violate the sovereignty of neighboring nations and repress its own citizens. The push towards energy independence should not come at the cost of our moral standing on the international stage.

So, what actions can be taken? Firstly, there is an urgent need for sustained advocacy around maintaining and strengthening sanctions against Russia. The lifting of these sanctions, especially in light of Putin’s ongoing aggression, would send the wrong message—not only to Russia but also to other nations who may be watching closely. Grassroots movements can mobilize to pressure lawmakers to uphold these economic measures, emphasizing that economic engagement should not come at the expense of ethical considerations. Moreover, engaging in public discourse about the implications of such corporate actions can galvanize public opinion against the normalization of business ties with Russia.

Additionally, we must bolster efforts to transition towards renewable energy sources domestically. By investing in alternative energy infrastructure and supporting policies that promote clean energy, we can reduce dependence on foreign oil and gas, thus circumventing the need for potentially problematic partnerships. This approach not only addresses immediate concerns about foreign investment in hostile regimes but also aligns with long-term climate goals and economic sustainability. Emphasizing energy independence through renewables can serve as a powerful narrative to counteract the allure of re-engagement with regimes like Russia.

In conclusion, the situation surrounding the Sakhalin-1 project serves as a critical reminder of the complexities of global energy politics and the moral imperatives at stake. As discussions continue in the U.S. concerning the lifting of sanctions and the potential return of corporate giants like Exxon Mobil to Russia, we must remain vigilant. Advocating for firm sanctions, promoting renewable energy, and fostering informed public discourse will equip individuals to challenge the normalization of business relations with authoritarian regimes and push for a foreign policy that prioritizes human rights and ethical standards above mere economic gain.

To Do:

The recent developments regarding the Sakhalin-1 oil and gas project highlight crucial geopolitical and economic issues that resonate deeply in our current global context. As individuals concerned about the implications of foreign investment in Russian energy, particularly in light of the ongoing conflict in Ukraine and the wider environmental impact of fossil fuels, there are several actions we can take to express our views and push for accountability. Here’s a detailed list of ideas and actions:

### What Can We Personally Do About This?

1. **Educate Yourself and Others**: Understanding the complexities of international sanctions, energy politics, and environmental issues is crucial. Share this knowledge through discussions, community forums, and social media platforms.

2. **Promote Energy Alternatives**: Advocate for renewable energy sources and support local initiatives aimed at reducing dependency on fossil fuels. Engage in conversations about the importance of transitioning to sustainable energy.

3. **Raise Awareness**: Use social media to raise awareness about the implications of returning investments to Russia. Share articles, write blogs, and participate in discussion groups to inform your networks.

4. **Engage with Local Representatives**: Communicate with your local and national representatives about your concerns regarding foreign investments in Russian energy projects and the associated geopolitical implications.

5. **Support Environmental and Human Rights Organizations**: Contribute time or resources to organizations that focus on environmental justice and human rights, particularly those that address the consequences of fossil fuel extraction and geopolitical conflict.

### Exact Actions You Can Personally Take

1. **Sign Petitions**: - **Petition to Oppose Investment in Russian Oil**: Look for petitions on platforms like Change.org that call for a halt to investments in Russian energy. A good example is petitions that urge governments not to lift sanctions on Russia or that demand accountability from corporations considering re-entering Russian markets. - **Example Petition**: “No More Russian Oil” (Change.org) – Search for this or similar petitions online.

2. **Contact Local and National Representatives**: - **U.S. Senators and Representatives**: Reach out to your local senators and representatives to express your concerns about potential investments in Russian energy. You can find their contact information on [congress.gov](https://www.congress.gov). - **Example Contacts**: - **Senator Chuck Schumer** (D-NY) - Email: schumer.senate.gov/contact/email-chuck - Address: 322 Hart Senate Office Building, Washington, DC 20510 - **Representative Nancy Pelosi** (D-CA) - Email: pelosi.house.gov/contact - Address: 1236 Longworth House Office Building, Washington, DC 20515

3. **Write Letters**: - **Letter to Exxon Mobil**: Voice your concerns regarding their potential return to the Sakhalin-1 project. - Address: Exxon Mobil Corporation, 5959 Las Colinas Blvd, Irving, TX 75039 - What to say: Express your disapproval of their involvement in Russian energy, emphasizing the human rights implications and the potential environmental damage.

4. **Engage with Environmental and Human Rights Organizations**: - Join or support organizations such as: - **Greenpeace**: Participate in campaigns against fossil fuel investments. - **Amnesty International**: Advocate for human rights and environmental justice in the context of energy extraction.

5. **Participate in Local Activism**: - Attend town hall meetings, protests, or community discussions focused on energy policy, foreign investments, or environmental issues. Engage with local activists to amplify your impact.

### What to Say

- When contacting representatives or companies, focus on the following points: - **Human Rights Concerns**: Emphasize the ongoing conflict in Ukraine and the need to prioritize human rights over profits. - **Environmental Impact**: Discuss the detrimental effects of fossil fuel extraction and the urgent need to invest in renewable energy. - **Economic Responsibility**: Stress the importance of economic sanctions in holding Russia accountable and the message it sends about international cooperation against aggression.

By taking these actions, individuals can play an important role in influencing policies around foreign investments and advocating for a more responsible and sustainable energy future.


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