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Exxon is latest oil major to announce departure from Russia over Ukraine invasion

Company says it plans to quit offshore project that it has described as Russia’s largest single foreign investment

ExxonMobil signage during the World Gas Conference in Washington on June 26, 2018. (Andrew Harrer/Bloomberg News)
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ExxonMobil said it plans to extract itself from a large oil and gas project in Russia and make no new investments in the country, becoming the latest energy major to break ties over Russia’s invasion of Ukraine.

The offshore project, off the coast of Sakhalin Island, was a big focus of former Exxon CEO Rex Tillerson, who began overseeing the investment in the late 1990s and developed a close relationship with Russian President Vladimir Putin before being named President Donald Trump’s first secretary of state in 2017.

“ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation. We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” the company said in a statement late Tuesday.

Exxon holds a 30 percent stake in the project as part of a consortium that also includes Russia’s Rosneft and Japanese and Indian companies. The project has produced more than $16 billion in taxes, royalties and other payments to Russian governments, federal and regional, according to a company website.

Exxon has called the project one of the largest single foreign direct investments in Russia, and has been developing it since the 1990s.

“We are beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture,” the company said.

BP to ‘exit’ its $14 billion stake in Russian oil giant in stark sign that Western business is breaking ties over Ukraine invasion

Exxon said that because it runs the project as the operator, its effort to “discontinue operations will need to be carefully managed and closely coordinated with the co-venturers to ensure it is executed safely.”

Tillerson’s role overseeing the project led to deep relationships with Russian leaders, including Putin, with whom Tillerson met on multiple occasions, both as Exxon chief and later as secretary of state in the Trump administration.

BP, Shell and a host of other Western companies in recent days have announced they planned to depart Russia. It isn’t clear whether any of the companies will find buyers for their holdings or simply walk away from them.

Peter Whoriskey contributed to this report.