Exxon Mobil Corp. mentioned on Wednesday its Russian unit Exxon Neftegas Ltd. has declared pressure majeure for its Sakhalin-1 operations because of sanctions on Russia which have made it more and more tough to ship crude to clients.
The Sakhalin-1 mission produces Sokol crude oil off the coast of Sakhalin Island within the Russian Far East, exporting about 273,000 barrels per day, primarily to South Korea, and to different locations together with Japan, Australia, Thailand and the US.
Exxon mentioned on March 1 it might exit about $4 billion in belongings and discontinue all its Russia operations, together with Sakhalin 1, following Moscow’s invasion of Ukraine on Feb. 24.
The oil producer is taking steps to exit Sakhalin 1, which incorporates addressing contractual and industrial obligations, Exxon spokesperson Julie King mentioned in a written response.
“As operator of Sakhalin-1, we have now an obligation to make sure the protection of individuals, safety of the surroundings and integrity of operations,” King mentioned.
Exxon has additionally considerably phased down its chemical and lubricant companies in Russia, and suspended gross sales of all chemical and lubricant merchandise into Russia and Belarus.
Venture stakeholders, which additionally embody Japan’s Sakhalin Oil and Fuel Growth consortium and Indian explorer ONGC Videsh, are having problem chartering tankers to ship oil out of a area that typically wants ice vessels to navigate the journey.
That’s due to rising issues from shippers over fame threat and the increasing difficulty for Russian assets to search out insurance coverage protection.
“Consequently, Exxon Neftegas Ltd. has curtailed crude oil manufacturing,” King mentioned.
The newest tanker to tackle crude at Russia’s De Kastri port – the place oil from Sakhalin-1 is loaded – was Aframax tanker Captain Kostichev, in line with knowledge on Refinitiv Eikon. The vessel is at present situated off De Kastri port.
Two different Aframax tankers, Victor Konetsky and Yuri Senkevich, typically used to ship Sokol crude to Yeosu, are empty and floating close to the port as effectively.
Japan’s Sakhalin consortium, which owns a 30% stake within the mission, declined remark, citing confidentiality agreements with Exxon.
(Reporting by Florence Tan; extra reporting by Yuka Obayashi in Tokyo and Sabrina Valle in Houston; enhancing by Marguerita Choy and Tom Hogue)
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