Exxon Mobil faces stark choice after rivals BP, Shell abandon Russia

Exxon Mobil Corp. is facing a tough choice over whether to leave Russia as rival supermajor oil explorers quit the country’s vast oil and natural gas fields in response to the invasion of Ukraine.
 

Although BP Plc and Shell Plc have announced plans to cut ties with Russian partners, Exxon hasn’t disclosed intentions for its 30% stake in a huge offshore crude development in the Russian Far East.

The moves by BP and Shell leaves Exxon and TotalEnergies SE as the only remaining supermajors with significant drilling operations in Russia. Unless an announcement comes sooner, Exxon Chief Executive Officer Darren Woods is expected to be grilled by analysts Wednesday during the company’s annual strategy presentation to Wall Street.

“The geopolitical urgency of energy security is much more central to the conversation that it would have been even 100 days ago,” said Pavel Molchanov, an analyst at Raymond James & Associates. “Exxon has a long-standing history in Russia and that relationship will be a question” at Wednesday’s event. 

Shell cited Russia’s “senseless act of military aggression” while BP said the invasion prompted a “fundamental rethink” of its ties with Rosneft. 

Exxon’s position in Russia already may be growing more tenuous after banking-sector sanctions threated the driller’s ability to pay local workers, according to a person familiar with the situation.

Woods’s predecessor and mentor, former CEO Rex Tillerson, avoided finding fault with Putin during a previous incursion in Ukraine that led to the seizure of the Crimean peninsula. 

“We don’t take sides in any geopolitical events,” Tillerson said in a 2014 meeting with reporters. “We have navigated these kinds of challenges before.”

Exxon made history when it successfully tapped gigantic oil reserves off the coast of Sakhalin Island. The Texas explorer oversees the Sakhalin-1 development that it co-own with Rosneft and companies from Japan and India. 

As for TotalEnergies, the French titan holds a major stake Novatek PJSC. Chevron Corp., which is also a member of supermajor clique, doesn’t conduct any drilling in Russia, although it holds an interest in a pipeline that crosses part of the nation’s territory.