This text is an automatic translation from Русский. It was generated by AI and may contain inaccuracies.
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This text is an automatic translation from Русский. It was generated by AI and may contain inaccuracies.
Read original →Putin has floated the possibility of ExxonMobil returning to the Sakhalin-1 project. Experts explain why this is likely a symbolic gesture and which American companies might be first to re-enter the Russian market.
Vladimir Putin allowed for the possibility of American ExxonMobil returning to the Sakhalin-1 project by introducing amendments to the corresponding decree. However, experts assess the probability of return as low, pointing to the need for sanctions removal and fulfillment of a number of conditions. A more realistic scenario is considered to be the return of oilfield services companies — Halliburton, Baker Hughes and SLB.
On the eve of the Alaska summit, Vladimir Putin opened the door to a possible return of ExxonMobil—one of the world's largest oil and gas corporations—to the Russian market. The president amended a decree on transferring the Sakhalin-1 oil and gas project to Russian jurisdiction, clearing the way for participation by a foreign investor that had previously abandoned its stake. That investor is the American company ExxonMobil. Before exiting Sakhalin-1, its share in the project stood at 30%. Other foreign investors—Japan's Sodeco with a 30% stake and India's ONGC Videsh (20%)—have maintained their participation in the project.
But it's not that simple. Independent oil and gas market expert Vladimir Demidov points out that to return to Russia, the company would need to meet several conditions: help facilitate the lifting of Western sanctions, sign contracts for the supply of necessary foreign equipment, and secure project financing (transfer of funds to Sakhalin-1 accounts).
The expert notes that ExxonMobil could return, but only if sanctions are lifted and the move makes sense from both a business and reputational standpoint. Such a decision would require either direct authorization from President Trump or the creation of a legal framework that would allow the company to return to Russia without risks.
According to industry publication Neftegaz.RU, the likelihood of ExxonMobil returning to the Sakhalin-1 project is quite low. After exiting the project in 2022, the American company took multibillion-dollar write-downs and has since focused its activities on other regions—particularly the U.S., Guyana, and the Middle East. Moreover, ExxonMobil's departure created major problems for the Russian side—falling production, difficulties selling output, and as a result, a 6-month shutdown.
The presidential decree itself is being perceived more as a symbolic gesture demonstrating Russia's openness to dialogue than as a genuine invitation to return.
Head of the Center for Analysis of Strategy and Technology Development in the Fuel and Energy Complex Vyacheslav Mishchenko recalls that the prospects for cooperation with Western companies were repeatedly discussed by Kirill Dmitriev, the president's special representative for investment and economic cooperation, who is responsible for communication with American business in negotiations with the United States. Such discussions have emerged due to Donald Trump's return to the White House, who has traditionally been a lobbyist for American corporations, including oil and gas companies.
According to Mishchenko, the Russian market remains attractive to the U.S.: the combination of Russia's rich deposits and American technology could open new prospects for both countries in hydrocarbon extraction, transportation, and sales.
All experts agreed that the anticipated "first wave" of returnees will most likely include oilfield services companies — Halliburton, Baker Hughes, and SLB. According to the industry resource Neftegaz.RU, Russian players have managed to fill the gaps left after the Americans' departure, but there is room in the domestic market for returning companies in the high-tech services segment. Moreover, SLB maintained its presence in Russia within the limits permitted by sanctions, while Baker Hughes sold its Russian subsidiary to management with a clear eye toward buying it back.
But SLB isn't the only one that remained in the Russian market: Vyacheslav Mishchenko notes that American energy corporation Chevron also retained its stake in the Caspian Pipeline Consortium project and continues to cooperate with Russia's Transneft in pumping Kazakh oil through Russian territory. The expert believes the company may be interested in a full-scale return to Russia if sanctions are eased.
A separate area for potential cooperation is the development of Arctic resources and use of the Northern Sea Route. Here, in Mishchenko's view, synergy between the countries could bring tangible benefits to both sides, including American trading companies, through the use of the unique transportation route — the Northern Sea Route.