Exxon Takes Legal Action over Putin Blocking Exit from Russia

ExxonMobil is taking legal action against Russia after President Vladimir Putin blocked the Texas-based fossil fuel company from leaving the country.

Exxon has taken preliminary steps to sue the Russian government after Putin intervened to block the corporation’s exit from his country.

The Wall Street Journal reported on Tuesday that Exxon issued a notice of difference to the Russian government earlier this week.

The move comes following a presidential decree issued by Putin that would prevent the company from exiting the Sakhalin-1 Project.

Sakhalin-1 is a large-scale project that has been drilling oil off the Pacific Coast of Sakhalin, a Russian-controlled island in the Japanese archipelago, since 2005.

The Sakhalin-1 Project, of which ExxonMobil is the principal operator, produced over 200,000 barrels of crude oil daily last year.

The project also includes the world’s longest oil well, the Z-44 Chavyo Well.

Despite the lucrative yields and high sunk cost of the Sakhalin-1 Project, the company’s continued involvement with Russia constitutes a challenge for the company’s public relations in the West, as well as humanitarian concern for the fossil fuel giant.

“ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation,” ExxonMobil said in a statement.

“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people.

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“In response to recent events, we are beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture …

“Given the current situation, ExxonMobil will not invest in new developments in Russia.”

ExxonMobil is far from the first Western company to seek to exit a joint venture with the Russian government following the country’s controversial invasion of Ukraine last February.

Last February, for example, the Norwegian state-owned energy company Equinor took preliminary steps to exit its joint ventures with the Russian government, a process which the company completed by the subsequent May.

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By Nick R. Hamilton

Nick has a broad background in journalism, business, and technology. He covers news on cryptocurrency, traditional assets, and economic markets.

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