US investors to Sakhalin-1 project return: Putin signs key decree
Photo: Vladimir Putin, Russian president (Getty Images)
Vladimir Putin has signed a decree that could pave the way for foreign investors, including Exxon Mobil, to return to the Sakhalin-1 project, according to Reuters.
On August 15, Vladimir Putin signed a decree that could allow the leading US oil company Exxon Mobil to regain its stake in the Sakhalin-1 oil and gas project.
Putin allows Exxon Mobil to return to Sakhalin-1
The decree builds on an earlier order from October 2022, when the Sakhalin-1 project was placed under the control of Rosneft subsidiary Sakhalinmorneftegaz-shelf. At that time, Exxon, which held a 30% stake and served as the project operator, became the only non-Russian investor to fully exit, writing off $4.6 billion.
Under the new decree, foreign shareholders who wish to return must help facilitate the lifting of Western sanctions, sign contracts for supplying essential imported equipment, and transfer funds into project accounts. Alongside Exxon, the remaining partners in Sakhalin-1 are Russia’s Rosneft, India’s ONGC Videsh, and Japan’s SODECO. The Russian government has allowed the Indian and Japanese companies to retain their stakes.
Timing linked to Trump–Putin summit
The signing of the decree coincided with Putin’s meeting with Donald Trump in Alaska, where, in addition to the war in Ukraine, investment and business cooperation between the US and Russia were expected to be on the agenda.
According to Reuters, Trump’s team had been considering ahead of the summit which sanctions on Russia might be lifted quickly in the event of progress on Ukraine.
For now, the path to reviving Western investment in Russia remains uncertain. The US and EU would need to roll back significant parts of their sanctions regimes to allow such investments.
Until now, Sakhalin-1 has not been directly targeted by the broad US sanctions imposed on Russia’s energy sector.
Since the start of the war, Russian oil prices have fallen from $100 to $55 per barrel. This sharp decline has slashed budget revenues and put the National Wealth Fund at risk, with experts warning it could be depleted by the end of 2025.
US President Donald Trump has repeatedly told Vladimir Putin that he should focus on reviving Russia’s economy, which, he said, is currently "in bad shape."
