FSUOGM: Russia seizes Sakhalin-1 oil and gas project

Russian President Vladimir Putin on October 7 ordered the seizure of the ExxonMobil-led Sakhalin-1 oil project, signing a decree that establishes a new operator to manage the development.

It follows a similar presidential decree introduced at the end of June, under which Russia transferred all rights and obligations of the consortium managing the Sakhalin-2 project to a Russian entity. Both decrees give the Russian government authority to decide whether foreign shareholders can retain their interests in the projects.

ExxonMobil operates Sakhalin-1 with a 30% interest, while Russia’s Rosneft, India’s ONGC Videsh Ltd (OVL) and Japan’s SODECO serve as partners. Prior to Russia’s invasion of Ukraine, the project, consisting of three offshore fields, was producing around 220,000 barrels per day of oil. But it has since fallen to only 10,000 bpd.

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