Exxon Mobil Nears Return to Russia's Sakhalin Oil Project After Two-Year Absence

Exxon Mobil is in talks with Russia's Rosneft to resume business in the Sakhalin-1 oil-and-gas project off Moscow's far-east coast, according to reports. The talks come after the US and Russian presidents met in Alaska, expressing willingness to do more business together. Exxon initially exited Russia in 2022 following Moscow's invasion of Ukraine, but now seeks US government support to resume operations. Exxon's return could help stabilize Russia's economy through peace talks and Western investment.

Exxon Mobil (XOM) is reportedly in discussions with Russia's state energy company Rosneft to resume business in the Sakhalin-1 oil-and-gas project off Russia's far-east coast. The talks come after U.S. and Russian presidents met in Alaska, expressing willingness to do more business together. Exxon initially exited Russia in 2022 following Moscow's invasion of Ukraine, but now seeks U.S. government support to resume operations [1][2][3].

The discussions are part of broader efforts to stabilize Russia's economy and facilitate peace talks through Western investment. The Sakhalin-1 project, majority-owned by Rosneft and Exxon, was seized by the Kremlin in 2022 due to Western sanctions. A decree signed by Russian President Vladimir Putin on August 15 could allow foreign shareholders to reclaim stakes in the project, provided they take steps to support lifting Western sanctions [1][2].

The talks also include the possibility of Russia purchasing U.S. equipment for its LNG projects, such as Arctic LNG 2, which is under Western sanctions. This could be part of a broader strategy to encourage Russia to buy U.S. technology instead of Chinese, aiming to weaken relations between Beijing and Moscow [1][3].

The U.S. government has internally discussed the possibility of using Russian nuclear-powered icebreakers to support the development of gas and LNG projects in Alaska. This idea was discussed during a high-profile summit between U.S. President Donald Trump and Russian President Vladimir Putin in Anchorage, Alaska [1][3].

The return of Exxon to Sakhalin-1 would have significant implications for the energy sector. It could help stabilize Russia's economy, reduce Western companies' legal exposure, and alter supply expectations. However, any credible path toward re-opening Russian energy projects would depend on progress in peace talks and the easing of sanctions [1][2][3].

References:
[1] Reuters. "US-Russian officials discussed energy deals alongside latest Ukraine peace talks." https://www.reuters.com/business/energy/us-russian-officials-discussed-energy-deals-alongside-latest-ukraine-peace-talks-2025-08-26/
[2] Eurasia Business News. "Exxon had secret talks with Rosneft about going back to Russia." https://eurasiabusinessnews.com/2025/08/26/exxon-had-secret-talks-with-rosneft-about-going-back-to-russia/
[3] StockInvest. "Exxon could reclaim Sakhalin-1 after $4.6B hit as US-Russia talks open door for Arctic LNG 2 gear sales." https://stockinvest.us/digest/exxon-could-reclaim-sakhalin-1-after-46b-hit-as-us-russia-talks-open-door-for-arctic-lng-2-gear-sales