News

Russian President Vladimir Putin has revised his 7 October 2022 decree transferring the Sakhalin-1 oil and gas project to Russian jurisdiction to add the conditions that a foreign consortium member must meet in order to regain its participation interest that was transferred under a Russian government decision.

The decree amending the previous decree was signed on 15 August 2025, the day the Russian and US presidents met in Alaska. In October 2022, Putin transferred the Sakhalin-1 project to Russian jurisdiction, and Exxon Neftegaz (a subsidiary of the US oil and gas corporation ExxonMobil), registered in the Bahamas, was replaced as the project operator by Sakhalin-1 LLC.

The foreign consortium members had to confirm their agreement to receive a proportional share in the new operator within a month. This was done by Japan's SODECO (30%) and India's ONGC (20%). However, ExxonMobil (30%) announced that it would cease its participation in the project and fully withdraw from Russia. Prior to that, Exxon tried to transfer its rights in Sakhalin-1 to an unnamed third party, but this move was blocked by Putin's decree, which banned transactions involving foreign shareholders' participation interests in Russia's strategic companies.

Under the 2022 decree, an interest in the Russian operator of the Sakhalin-1 project that is unclaimed by a foreign party to the consortium is subject to valuation by the Russian government and sale to a Russian legal entity that meets certain criteria. The valuation of ExxonMobil's interest is still pending.

According to the interpretation of some media outlets, Putin's new decree potentially allows ExxonMobil to regain its stake in the Sakhalin-1 project. According to the document, the conditions for this to happen are that:

• the new Russian operator's bank account is credited with funds previously accumulated in the liquidation account under the production sharing agreement;
• supply contracts are signed for foreign-made equipment and spare parts required for the project;
• actions resulting in the lifting of sanctions that adversely affect project implementation are taken, including judicially contesting them.

On 15 August, the Russian and US presidents held a meeting in Alaska, the first since 2021. One of the central issues of the talks was the Ukraine situation. Putin said at the end of the summit that Russia was interested in peace in Ukraine, however, "in order for a Ukraine settlement to be sustainable and long-term, all the root causes of the crisis must be eliminated". According to US President Donald Trump, the sides "made significant progress." On 19 August, Trump said he had started discussing with Putin preparations for his meeting with Ukrainian President Volodymyr Zelenskyy.