ExxonMobil in Russia

March 2020

Article

In this article

Overview

  • Operated the Sakhalin-1 Project under the Production Sharing Agreement (PSA) on behalf of the Sakhalin-1 Consortium since 1995; ExxonMobil has 30 percent interest.
  • Over 20 years of continuous business presence across Upstream, Downstream and Chemical divisions.
  • More than 1,000 employees in Russia total.
  • Upstream offices located in Moscow and Yuzhno-Sakhalinsk.
  • Sakhalin-1 production infrastructure located in two regions in the Russian Far East and includes five major sites with more than 700 Russian nationals employed by ENL.
  • Downstream offices located in Moscow, St. Petersburg, Yekaterinburg and Novosibirsk.

Activities

Upstream

Sakhalin-1 project overview

  • Affiliate name: Exxon Neftegas Limited (ENL).
  • ENL co-venturers 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).
  • The Sakhalin-1 license area 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 January 2020, 118.2 million tons (885.3 million barrels) of oil and condensate were exported, and safely delivered to international markets via the ENL-operated De-Kastri oil terminal without spilling a single drop of oil; over 27 billion cubic meters (939 billion cubic feet) of natural gas delivered to Russian Far East customers. 
  • Sakhalin-1 co-venturers agreed to progress plans to develop the Russia Far East Liquefied natural gas (LNG) project to monetize the Sakhalin-1 gas and have started preparations for front-end engineering and design with a view to considering a final investment decision in due course.
  • The proposed project will include expansion of the Chayvo onshore processing facility, construction of an approximate 220-kilometer gas pipeline and a 6.2 million tons per year LNG plant located near the Sakhlain-1 De-Kasti oil export terminal in Khabarovask Krai.
  • Russia Far East LNG is being developed under the existing Sakhlain-1 production sharing agreement and will use Sakhalin-1 gas reserves as the primary resource base.

Exploration and Research Joint Ventures with Rosneft

  • Prior to 2014, ExxonMobil and Rosneft established various joint venture entities to conduct exploration and research activities in Russia. 
  • In 2014, the European Union and United States imposed sanctions relating to the Russian energy sector. In the latter half of 2017, the United States codified and expanded sanctions against Russia.
  • Following codification of the sanctions in late 2017, ExxonMobil decided to withdraw from these joint ventures. ExxonMobil completed formal withdrawl in 2018.
  • With respect to the foregoing, ExxonMobil continues to comply with all applicable laws, rules and regulations. 

Downstream

Lubricants

  • Affiliate name: Mobil Oil Lubricants LLC.
  • Mobil branded lubricants are sold through a country-wide network of 25 independent distributors.
  • Mobil 1, Mobil Delvac 1 and Mobil SHC lubricants have strong presence in Russia among passenger vehicles, commercial vehicles, 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) licenses a broad portfolio of ExxonMobil's refining, gas and chemical technologies and offers specialty catalysts for the manufacturer of fuels, lubricant base stocks, basic chemicals and intermediates products. Our high performing catalysts, advanced process technologies and global operating experience help customers improve operations, lower emissions, and grow high-value products.  

CPC Pipeline

  • ExxonMobil affiliate has 7.5 percent interest in the Caspian Pipeline Consortium (CPC) which operates a 1,511-kilometer pipeline transporting oil from Kazakhstan Tengiz to the Russian port of Novorossiysk in the Black Sea.  
  • In 2018, the Consortium completed a major expansion project increasing the total throughput capacity of the pipeline to 1.4 million barrels per day (67 million tonnes per year). The pipeline system transports ExxonMobil equity production from the Tengiz and Kashagan fields. 
  • In 2019, the CPC consortium supported investment in a debottlenecking project to allow 72.5 million tonnes from Kazakhstan to be exported via CPC and the project is ongoing to deliver this additional capacity. CPC is targeting to have the capacity available from mid-2022 to support the increase in Tengiz production.

Safety, health and the environment

  • The 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$ 3.6 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$ 16 billion in state share of oil ans gas, tax and royalty payments to the Federal and Regional Governments, including US$ 6.6 billion– to the Sakhalin budget.
  • To-date, more than US$ 16 billion in contracts has been awarded to Russian contractors and joint ventures with Russian participation. 
  • More than US$ 230 million has been invested into upgrades of infrastructure used jointly by the Sakhalin-1 project and local communities, including hospitals, roads, power and water facilities.
  • Over US$ 34 million of charitable contribution programs have been implemented by the Sakhalin-1 Consortium to improve healthcare, education and to support indigenous communities.
  • ENL was recognized by various Russian organizations as a leader in Corporate Social Responsibility in 2015, 2016 and 2017, and environmental performance in 2015, 2016, 2017 and 2019. 
  • In 2013 and 2017, ExxonMobil Russia Inc. implemented a women’s health project to address the need for early cancer diagnosis and preventive healthcare in the Archangelsk and Murmansk regions. This program upgraded diagnostic and rehabilitation equipment for hospitals and launched a public awareness campaign for early check-ups. Since 2018, the company has supported the program extension in Moscow.
  • In 2019 ExxonMobil Russia Inc. celebrates 9 years of continuous support of the development programs for people with Down syndrome and the international Gala-concert of ballet stars Benois de la Danse traditionally taking place at the main stage of Bolshoi theater.   

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