Source: Exxon Neftegas Limited withdraws from Sakhalin-1

MOSCOW, Mar 7 (PRIME) -- Former operator of the Sakhalin-1 project Exxon Neftegas Limited, an affiliate of U.S. ExxonMobil, has stopped operations on the project because of sanctions, a source with knowledge of the litigation told PRIME on Tuesday.

"According to Exxon Neftegas Limited’s letters attached to the materials of the case considered by the court in Yuzhno-Sakhalinsk, the company stopped all operations, because the U.S., the U.K. and the E.U. introduced sanctions against the Russian Federation," the source said.

According to the source, the court turned down the grounds for a force major presented by Exxon Neftegas Limited, because the sanctions violate U.N. Charter's Article 41. Besides, the other members of the consortium, India and Japan, consented to continuation of their participation.

On October 7, President Vladimir Putin ordered the government to set up a new Russian operator of the Sakhalin-1 project, which will take over the rights and responsibilities of Exxon Neftegaz Limited. Sakhalinmorneftegaz-Shelf, a subsidiary of oil major Rosneft, was appointed the new operator’s managing company.

The subsidiary of ExxonMobil was the project’s operator with a 30% stake, Rosneft had 20%, Japan’s Sodeco had 30%, and India’s ONGC had 20%. ExxonMobil said in March 2022 it would leave the project and announced a force major event in April, which almost stopped production at Sakhalin-1. In August, the company said that was working on a transfer of its stake in the project to another company.

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