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ExxonMobil may simply sue the Russian government over a decree through Vladimir Putin blocking the announced withdrawal of the supermajor from a large oil allocation in Russia, the Wall Street Journal reports, bringing resources familiar with the matter.
Exxon has already informed the Russian government that it can take legal action unless Russia allows the U. S. oil and fuel giant to abandon the Sakhalin-1 joint venture.
At the start of russia’s invasion of Ukraine, Exxon said it would leave the Sakhalin-1 oil allocation in Russia. The company said it would also make new investments in Russia and added that the closing procedure would be coordinated with its co-owner consortium.
The Sakhalin-1 allocation was controlled through Exxon on behalf of its consortium partners, which include Japan’s Sodeco, India’s ONGC Videsh and Russian oil giant Rosneft.
More recently, Exxon said so in the procedure of moving the 30% stake “somewhere else. “
However, in early August, Putin signed a new decree through which Russia prohibits corporations from what it considers “unrefined” countries from promoting stakes in key energy projects and sharing agreements in oil and fuel production until the end of the year.
Exxon later sent a notice of difference to the Russian government, which is ushering in an imaginable era of resources in advertising contracts before going to court, Exxon spokesman Casey Norton told the Journal.
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Rosneft, for its part, said the problem could be solved if overall production operations at Sakhalin-1 are restored.
“The return to general production operations of the Sakhalin-1 assignment may create the mandatory situations for all contentious issues,” a Rosneft representative told the Journal.
For the Russian project, Sakhalin-2, Putin ordered in July that a newly created Russian state-owned company take over the rights and obligations of Sakhalin Energy Investment Co. , the joint venture that manages the project.
In August, russia’s gave a month to minority foreign investors from Sakhalin-2 – Shell and Japan’s Mitsui
By Tsvetana Paraskova for Oilprice. com
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