Russia Offers ExxonMobil a Path Back to Sakhalin Energy Project Amid Geopolitical Turbulence.

Russian President Putin has signed a decree that allows for the possible return of ExxonMobil to the Sakhalin-1 project, a strategic energy venture on Sakhalin Island with recoverable reserves of 2.3 billion barrels of oil and 17.1 trillion cubic feet of natural gas. The project was previously transferred under Russian jurisdiction, but the new decree offers a path for foreign companies to re-enter the venture. ExxonMobil had withdrawn from the project in March due to Western sanctions following Russia's invasion of Ukraine.

Russian President Vladimir Putin has signed a decree that offers a pathway for ExxonMobil to re-enter the Sakhalin-1 project, a strategic energy venture located on Sakhalin Island. The project, which holds recoverable reserves of 2.3 billion barrels of oil and 17.1 trillion cubic feet of natural gas, was previously transferred under Russian jurisdiction in October 2022 [1].

The decree, issued on August 15, 2025, comes amidst a pivotal meeting between President Trump and President Putin, signaling a potential shift in US-Russian relations. The decree outlines strict conditions for foreign companies to reclaim their stakes in the project, including the lifting of Western sanctions, securing contracts for foreign-made equipment, and transferring funds to the project's accounts [2].

ExxonMobil withdrew from the project in March 2022 due to Western sanctions imposed following Russia's invasion of Ukraine. The withdrawal resulted in a significant impairment charge of $4.6 billion for ExxonMobil. The new decree, however, indicates a willingness by the Russian government to reengage with foreign stakeholders, albeit under conditions that advance its own strategic and operational needs [2].

The decree also underscores the geopolitical significance of the Sakhalin-1 project. The project's ownership structure has shifted under sanctions and war, with exports crashing and trade flows being reshaped. China has emerged as the largest buyer, taking in 118,000 b/d in 2025 to date [2].

A return of ExxonMobil to the project could also signal a pathway back into Russia's broader Arctic ambitions. The US sanctions forced Exxon to abandon its joint Arctic exploration with Rosneft in 2014, which held the potential for significant hydrocarbon reserves [2].

For now, Putin's August decree is a signal, not a deal. However, it underscores how tightly the fate of strategic energy projects like Sakhalin-1 is bound to the arc of geopolitics. The legal structures, the buyers, the flows – all have shifted under sanctions and war. What Putin offered on August 15 was not simply a regulatory amendment. It was an invitation, timed to a pivotal political moment, hinting at how energy remains a currency of diplomacy as much as commerce [2].

References:
[1] https://www.offshore-technology.com/news/russian-decree-exxon-mobil-reclaim-share-sakhalin-1/
[2] https://oilprice.com/Energy/Crude-Oil/Russia-Offers-ExxonMobil-a-Path-Back-to-Sakhalin.html