ExxonMobil's Russian subsidiary Exxon Neftegas has declared force majeure for its Sakhalin 1 project, a spokesperson told S&P Global Commodity Insights April 29.
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Some traditional buyers of Russian oil have been seeking alternative suppliers since Russia's invasion of Ukraine Feb. 24 triggered major financial sanctions.
This has seen Russian crude grades trade at significant discounts. Platts assessed Sokol CFR Japan/Korea Spore vs Mean of Dubai at -$22.5/b April 29, S&P Global data showed. This is down from $7.95/b on Feb. 23, the day before the Russian invasion.
ExxonMobil holds a 30% stake in Sakhalin 1. Other partners include Rosneft with 20%, Japan's Sodeco with 30% and India's ONGC Videsh with 20%. The stakeholders receive Sokol crude oil, corresponding to their stakes, and sell their equity crude in the market.
Exxon Neftegas has curtailed crude oil production as a result of the force majeure but the company did not provide further details.
The spokesperson said that ExxonMobil is proceeding with efforts to discontinue operations at Sakhalin 1. On March 1, the company said it would discontinue operations at the project and avoid new investments in Russia.
In recent years, ExxonMobil has reduced its involvement in Russia. In 2018, it said it announced withdrawal from joint ventures set up with Rosneft in 2013 and 2014. This followed the introduction of the US and EU sanctions against Russia over its role in the conflict in Ukraine in 2014, and the further expansion and codification of the US sanctions in 2017.