Russia Signs Decree Allowing Foreign Investors to Regain Shares in Sakhalin-1 Project

Russia's President Putin has signed a decree that could allow foreign investors, including Exxon Mobil, to regain shares in the Sakhalin-1 oil and gas project. The signing occurred on the same day Putin met President Biden in Rome, where they discussed energy security and investment. The decree allows for the possibility of foreign investors regaining their shares in the project, which was nationalized in 2006.

Russia's President Vladimir Putin has signed a decree that could pave the way for foreign investors, including Exxon Mobil, to regain shares in the Sakhalin-1 oil and gas project. The decree was signed on the same day Putin met with President Biden in Rome, where energy security and investment were among the topics discussed [1].

The decree follows a similar one signed in October 2022, which effectively nationalized Sakhalin-1. Exxon Mobil, which held a 30% stake and was the project operator, withdrew from the project, writing off $4.6 billion. The decree stipulates that foreign shareholders wishing to regain their stakes must contribute to lifting Western sanctions against Russia, sign contracts for the supply of necessary foreign equipment, and transfer funds to the project's accounts [1].

Earlier, the Russian government allowed India's ONGC Videsh and Japan's SODECO to retain their stakes in Sakhalin-1. Rosneft was appointed as the project operator through its subsidiary Sakhalinmorneftegaz-Shelf [1].

The decree indicates a potential shift in Russia's stance towards Western investment, although the path remains uncertain due to the need for significant easing or lifting of U.S. and EU sanctions. The decree comes at a time when more than 1,300 international companies have reduced or ceased operations in Russia due to sanctions, resulting in over $170 billion in losses [2].

References:
[1] https://biz.liga.net/en/all/tek/novosti/putin-signs-decree-allowing-us-exxon-to-return-to-sakhalin-1-project
[2] https://www.investing.com/news/commodities-news/russia-decree-opens-door-for-exxon-return-to-sakhalin1-project-4196026