Exxon Mobil is warning it will sue Russia if the oil major isn't allowed to halt projects there amid efforts by President Vladimir Putin to end the exodus of international companies after the invasion of Ukraine.
“Under Russian Law, our path has been blocked by the recent Presidential Decree 520,” said Exxon Mobil spokeswoman Meghan Macdonald in an email on Tuesday. “We have provided a notice of difference to the Russian Federal Government regarding the decree, which inhibits our rights and impedes our ability to exit operations safely.”
RELATED: Exxon stops oil production in Russia as war in Ukraine intensifies
A notice of difference is a precursor to a lawsuit in many commercial contracts. In this case, Exxon Mobil sent notice to the Russian government because state-owned oil company Rosneft is a partner in the Sakhalin-1 project. A suit would likely be filed with an international arbitration court outside of Russia.
For its part, Rosneft said disagreements stem from Exxon’s choice to decrease production, which translated to financial losses for all the partners, according to The Wall Street Journal, which first reported the news. Rosneft said if Exxon returns to normal production levels it would resolve any issues.
The Sakhalin-1 project, the last of Exxon's projects in Russia, started pumping oil in 2005, and last year it produced about 227,000 barrels a day.
In April Exxon said it took a $3.4 billion writedown to reflect the costs associated with the company's efforts to swiftly exit from Russia. It joined other energy giants such as BP and Shell in taking billions of dollars worth of hits to their bottom lines after halting Russian operations.
Other major firms leaving, suspending or reducing Russian operations in the weeks after the war began included Sony, clothing maker Uniqlo, McDonald's, JPMorgan Chase, Goldman Sachs and Citigroup. Credit card companies Visa, Mastercard and American Express also suspended operations in Russia, making consumer transactions difficult.
Bloomberg contributed.
https://www.houstonchronicle.com/business/energy/article/Exxon-Mobil-gets-ready-to-sue-Russia-over-halted-17407396.php
2022-08-30 16:06:50Z
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