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ExxonMobil in Russia

Fact sheet, May 2017

  • 20 years of continuous business presence across Upstream, Downstream and Chemical divisions.
  • About 1,000 employees in Russia total.
  • Upstream offices located in Moscow and Yuzhno-Sakhalinsk.
  • ExxonMobil has operated the Sakhalin-1 project under Production Sharing Agreement (PSA) on behalf of the Sakhalin-1 consortium since 1995; ExxonMobil has 30 percent interest.
  • Sakhalin-1 production infrastructure located in two regions in the Russian Far East and includes five major sites with more than 800 employees.
  • Downstream offices located in Moscow, St. Petersburg, Yekaterinburg, Novosibirsk and Vladivostok.

ACTIVITIES

UPSTREAM

Sakhalin-1 project overview

  • Affiliate name: Exxon Neftegas Limited (ENL).
  • ENL partners in the Sakhalin-1 project include the Japanese consortium SODECO (30 percent); the Indian state-owned oil company ONGC Videsh Ltd. (20 percent); and two Rosneft affiliates (combined 20 percent).
  • Sakhalin-1 includes three oil and gas fields – Chayvo, Odoptu and Arkutun-Dagi – located off the northeast coast of Sakhalin Island in the Russian Far East. Potential recoverable resources are 2.3 billion barrels of oil (307 million tons) and 17.1 trillion cubic feet of natural gas (485 billion cubic meters).
  • Sakhalin-1 oil and gas production commenced in October 2005 from the Chayvo block, in September 2010 from the Odoptu block, and in January 2015 from the Arkutun-Dagi block.
  • As of May 2017, over 670 million barrels of oil (almost 88 million tons) have been produced and delivered to international markets via the ENL-operated De-Kastri oil terminal and more than 720 billion cubic feet of natural gas (over 20 billion cubic meters) have been delivered to customers in Khabarovsk Krai. The Sakhalin-1 project is currently expanding oil and gas production from both the Odoptu block and the Arkutun-Dagi block.
  • Sakhalin-1 Consortium continues to explore opportunities to monetize Sakhalin-1 gas resources to maximize benefits to the consortium and the Russian state. Monetization options include upstream sales or exporting the gas via a pipeline or as LNG.
  • ExxonMobil and Rosneft signed a memorandum of understanding in February 2013 to jointly study the economic viability of a Russian Far East liquefied natural gas (LNG) project. ENL is progressing pre-FEED activities, including concept design, cost optimization and site surveys. ENL and its Sakhalin-1 co-venturers selected the De-Kastri site in the Khabarovsk Krai, near the Sakhalin-1 oil export terminal, as the most optimal site location for an LNG plant. LNG plant design capacity will be around 6 million tons per year and will use Sakhalin-1 gas reserves as the primary resource base.

STRATEGIC COOPERATION AGRREMENT WITH ROSNEFT

  • In August 2011, OAO NK Rosneft and ExxonMobil concluded a strategic cooperation agreement to establish the framework for joint oil and gas exploration and production in Russia, the United States and other countries.
  • Following the signing of the strategic cooperation agreement, Rosneft and ExxonMobil formed 10 joint ventures for projects in the Russian Arctic, the Black Sea and western Siberia.
  • In 2014, one of the Rosneft and ExxonMobil joint ventures drilled the first Arctic exploration well, University-1, in a safe and environmentally responsible manner.
  • In 2014, the European Union and the United States imposed sanctions relating to the Russian energy sector. In compliance with the sanctions, prohibited activities offshore Russia in Arctic regions, the Black Sea, and onshore western Siberia have been wound down.

DOWNSTREAM

Lubricants

  • Affiliate name: Mobil Oil Lubricants LLC.
  • Lubricants are marketed under the Mobil brand and sold through a country-wide network of 33 independent distributors.
  • Mobil 1, Mobil Delvac 1 and Mobil SHC lubricants are the leading brands in Russia for passenger vehicle, commercial vehicle and industrial applications.

CHEMICAL

  • ExxonMobil markets a wide range of petrochemical products in Russia that are used by local industries (packaging, construction, automotive) to develop and produce high-quality consumer products.
  • Catalysts & Licensing Global Business Unit (EMCL) supplies catalysts and offers technologies for refinery and petrochemical industries. EMCL has 15 ongoing projects with all major Russian oil companies, including 5 with Rosneft and 3 with Gazpromneft, Lukoil, Zarubezhneft and others, in lube, fuels, resid upgrading and gas treating areas. EMCL is pursuing new opportunities in Methanol to Gasoline and gas condensate treating technologies with Gazprom.

CPC PIPELINE

  • ExxonMobil affiliate has 7.5 percent ownership in the Caspian Pipeline Consortium (CPC) pipeline, which transports oil from Kazakhstan to the Russian port Novorossiysk in the Black Sea.
  • An expansion project is currently underway to increase CPC export capacity from 600,000 barrels per day to 1.4 million barrels per day.

SAFETY,HEALTH AND THE ENVIRONMENT

  • ENL has been consistently recognized as one of the corporation’s leading affiliates for excellence in safety, health and environmental performance. In 2016, ENL received three of ExxonMobil’s top safety and performance awards including the EMPC Presidents Operational Excellence Award, the EMDC Presidents Projects Safety Award and the EMDC Presidents Drilling Safety Award.
  • industry’s leading technologies and a wide range of experts from Russian and international research and design institutions ensure the safety and integrity of Sakhalin-1 operations. More than US$ 2.5 billion has been invested to protect local wildlife, habitats and land uses. Since 1997, the Sakhalin-1 project has conducted a research program in which prominent whale experts have acquired unique data on endangered Western Gray whales in the region.

CORPORATE SOCIAL RESPONSIBILITY

  • Since its startup, the Sakhalin-1 project has generated more than US$13 billion in tax and royalty payments to the federal and regional governments.
  • To-date, more than US$15 billion in contracts has been awarded to Russian contractors and joint ventures with Russian participation.
  • More than US$250 million has been invested into upgrades of infrastructure used jointly by Sakhalin-1 project and local communities, including hospitals, roads, power and water facilities.
  • Approximately US$30 million of charitable contribution programs have been implemented by Sakhalin-1 Consortium to improve healthcare, education and to support indigenous communities.
  • In 2015 and 2016, ENL was recognized by various Russian organizations as a Leader in Corporate Social Responsibility for its support of local communities.
  • Since 2013, ExxonMobil has implemented the women’s health project in the Archangelsk and Murmansk regions to address the need for early cancer diagnosis and preventive healthcare. This program upgraded diagnostic and rehabilitation equipment for hospitals and launched a public awareness campaign for early check-ups

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