Exxon Mobil likely will face new pressure to severe ties with Russia's largest oil producer, said analysts, after rival BP agreed to unload a Rosneft stake.
Russia's attack on Ukraine has unleashed broad economic and political rebukes and corporate withdrawals by banks, technology and other firms unprecedented in their extent. BP on Sunday said it would take a $25 billion writedown to abandon its Rosneft holdings.
Exxon holds a 30% stake, alongside Rosneft, Japan's SODECO and India's ONGC Videsh, in Sakhalin Island oil and gas fields in Russia’s Far East. The group with Exxon as operator has exported more than 1 billion barrels of oil and 1.03 billion cubic feet of natural gas since production began in 2005.
"Supermajor E&Ps and major service providers with exposure to Russia will now be facing tremendous pressure to pull investments from Russia," said Rystad Energy analyst Artem Abramov.
"I will not be surprised if we see big announcements similar to (the) BP-Rosneft one in the next few days, but it will be difficult to speculate on how exactly things will play out," he said.
An Exxon spokesperson did not reply to a request for comment.
The U.S. oil major previously ended two Russian joint ventures after sanctions were imposed following Russia's 2014 military operations in eastern Ukraine. Exxon took a $200 million hit to earnings from the exit.
Sakhalin represents one of the largest single direct investments in Russia, according to Exxon, with its three oil and gas fields. The partners have been advancing development of a new liquefied natural gas (LNG) facility on the island. Such plants typically cost several billion dollars to construct.
Exxon last year employed more than 1,000 people across Russia with offices in Moscow, St. Petersburg, Yekaterinburg and Yuzhno-Sakhalinst, according to its website.
Recommended Reading
Bakken Pipeline’s Oil-to-NGL Switch Could Prove Costly
2024-08-30 - Kinder Morgan’s challenge to ONEOK over Bakken NGL could upset the market’s balance.
Kinder Morgan to Boost NatGas Capacity in Texas
2024-10-16 - Kinder Morgan said it has made FID for the Gulf Coast Express expansion and confirmed a new pipeline project to move gas to the site of future Southeast Texas LNG export facilities.
Analyst: US NGL Market Tightens Links to Crude, NatGas Production
2024-09-02 - A boost in propane and ethane development is tied to the opening of the Matterhorn Pipeline in the Permian, evidence of the increasingly closer link between different sectors of the energy industry.
TPH: LNG Agreements Start to Materialize, but Most Non-binding
2024-09-17 - Since the end of April, U.S. LNG export facilities have made agreements totaling 16 mtpa, or 72% of the year’s 22.5 mtpa in offtake agreements.
As US Ethane Production Soars to Record High, Low Prices Expected
2024-10-29 - Tied to natural gas production, which has suffered from weak demand, ethane is also headed for bearish prices, according to an analyst.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.