Exxon chief says company has ‘no plans to re-enter Russia’

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ExxonMobil’s chief executive said the oil major has no plans to return to working in Russia, despite a political push by Moscow and Washington to link energy investments to a peace deal in Ukraine.

Darren Woods told the Financial Times that Exxon executives are involved in discussions with Russian officials about recouping $4.6bn in assets expropriated by Moscow but not about investing in the country.

He said the talks began in early 2023 shortly after the company filed an arbitration case against President Vladimir Putin’s government, which months earlier seized control of Exxon’s 30 per cent stake in Sakhalin-1, a gigantic oil project in Russia’s far east.

“We don’t have any plans to re-enter Russia,” Woods said in an interview. “This was really around settlement discussions around the arbitration associated with the expropriation of our assets in 2022.”

Last month President Trump discussed normalising and deepening economic ties with Russia at a peace summit in Alaska with Putin. But so far there has been no breakthrough in peace talks and Washington this week suggested it could increase sanctions on Russia, if its Nato allies halt purchases of Russian oil and gas.

Russian officials continue to suggest Exxon could be allowed to return to the country.

On Wednesday Sergey Ryabkov, Russia’s deputy foreign minister, told the Interfax news agency that talks between Kirill Dmitriev, Putin’s special envoy for investment, and US officials were ongoing around co-operation on energy deals, including Sakhalin-1.

“I can mention Sakhalin-1 as the most obvious example of discussions that have started,” said Ryabkov. “We are ready to deepen these discussions and are open specifically to practical co-operation.”

Media reports last month said senior Exxon executives held talks with Russian officials about returning to the Sakhalin-1 project amid a wider push by the Trump administration to secure a peace deal in Ukraine.

The reports followed Putin’s decision to amend the Russian decree seizing ExxonMobil’s Sakhalin stake, potentially paving the way for the re-entry of western oil companies.

Analysts said Russia is keen to attract western oil majors to provide investment and technical skills that are needed for complex offshore operations, such as Sakhalin-1.

But western oil majors are hesitant to return to Russia after writing off billions of dollars of investments over recent years, they said.

“The geopolitical and country risks remain extremely high, while Exxon has many more attractive opportunities for capital allocation globally,” said Tatiana Mitrova, a research fellow at the Center on Global Energy Policy at Columbia University.

“A purely financial decision to approve the restoration of a stake in Sakhalin-1 might be possible — there’s little to lose and some incremental revenue to gain — but any expectation of fresh investments or new joint projects is far more problematic.”

Exxon’s Woods also issued a fresh threat to European Union policymakers over the Corporate Sustainability Due Diligence Directive, a regulation he said would cause Exxon to pause investment and accelerate its exit from the bloc, where it employs 12,000 people.

He said the regulation, which will require all EU and non-EU companies with significant turnover in the bloc to ensure their supply chains do not harm the environment or human rights, was an example of “vigilante enforcement” due to fines of up to 5 per cent of global turnover.

“We see this as untenable. Our ability to continue to operate and do business in Europe with that law hanging over our heads I think is going to make it impossible to continue what we’ve been doing. It’s only going to accelerate our exit from Europe.”