Russian President Vladimir Putin on Friday signed a decree that could allow foreign investors, including top US oil major Exxon Mobil, to regain shares in the Sakhalin-1 oil and gas project.
The signing of the decree comes on the day Russian president Vladimir Putin meets Donald Trump in Alaska for a summit where opportunities for investment and business collaboration will be on the agenda, alongside talks to find peace in Ukraine.
Friday’s decree was published as a follow-up to one Putin signed in October 2022, which ordered the seizure of the Sakhalin-1 project.
Exxon previously held a 30 per cent operator share in the lucrative project, and is the only non-Russian investor to have quit its stake.
Exxon did not immediately reply to Reuters request for comment.
The path to Western investment returning to Russia is unclear given the US and European Union would need to lift far-reaching sanctions to facilitate investment. Companies who might wish to return, having spent significant amounts of money to exit the country three years ago, also face high barriers put up by the Russian government.
Trump and his team have considered what sanctions they may be able to lift quickly in the case of progress in talks. Sakhalin-1 has to date not been directly designated under extensive US sanctions on Russian energy.
The decree stipulates that foreign shareholders must undertake actions to support the lifting of Western sanctions if they want to regain their share. They must also conclude contracts for supplies of necessary foreign-made equipment to the project, and transfer funds to Sakhalin-1 project accounts.
Exxon took an impairment charge of $4.6 billion to exit its Russian business after Moscow sent troops into Ukraine in February 2022.
In December 2024, Putin signed a decree extending the sale period for the unclaimed Exxon stake in Sakhalin-1 until 2026.
The October 2022 decree established Rosneft subsidiary Sakhalinmorneftegaz-shelf as the new operator, allowing the Russian government to decide foreign investors’ ownership rights in Sakhalin-1.
Alongside Exxon, Russian company Rosneft, India’s ONGC Videsh and Japan’s SODECO were partner investors. The Russian government allowed both ONGC Videsh and SODECO to keep their stakes.
