Exxon in Talks to Reenter Russia's Sakhalin Energy Project

Exxon Mobil has held discreet talks with Rosneft since 2022 to reenter the Sakhalin energy project, contingent on a potential Ukraine peace deal. Exxon exited Russia in 2022 after Moscow blocked a sale of its stake in Sakhalin-1, writing down over $4 billion. Any Exxon comeback would require favorable terms to offset past losses and contend with Russia's shifting economic climate.

Exxon Mobil Corporation and Rosneft, Russia's state-controlled oil company, have held secret discussions about resuming work on the Sakhalin-1 project in Russia's Far East. The talks are contingent on government approval as part of a potential Ukraine peace deal. The project was put on hold in 2018 due to U.S. sanctions against Russia [1].

The discussions took place in Doha, Qatar, and were led by Exxon's Senior Vice President Neil Chapman and Rosneft CEO Igor Sechin, a close ally of Russian President Vladimir Putin. Exxon executives reportedly sought U.S. government support for their return to Russia, and CEO Darren Woods discussed the possibility with President Trump at the White House [3].

The Sakhalin-1 project, which Exxon and Rosneft previously collaborated on, involves 2.3 billion barrels of oil and 17.1 trillion cubic feet of gas. The project was one of Exxon's largest investments, with the company owning 30% of the venture alongside Rosneft, Japanese, and Indian companies, which continue to operate the site [2].

The talks come amid a shifting geopolitical landscape, with the Ukraine war serving as a backdrop. The U.S. and Russia have been engaged in energy diplomacy, with the potential easing of sanctions and the need to stabilize energy markets playing a significant role. Exxon's return to Russia could reshape the company's portfolio and energy markets, but it also presents risks, including geopolitical volatility and potential clashes with the company's climate transition goals [2].

Exxon's potential return to Russia also exposes the company to reputational risks and the scrutiny of climate activists and regulators. The company's ability to integrate decarbonization into its Russian operations remains uncertain. For investors, the key is to assess whether Exxon can navigate these risks while aligning with its energy transition goals [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-08-26/exxon-held-talks-with-rosneft-over-russia-re-entry-wsj-says
[2] https://www.ainvest.com/news/exxon-potential-return-russia-strategic-implications-energy-markets-shareholder-2508/
[3] https://seekingalpha.com/news/4489302-exxon-held-secret-talks-with-rosneft-about-returning-to-russia---wsj