Putin Oil & Gas: What the New Decree Means for ExxonMobil and Sakhalin‑1
A new directive signed by Russian President Vladimir Putin could allow ExxonMobil to re-enter the massive Sakhalin‑1 oil and gas project. While tensions remain between Russia and the West, this move signals a possible shift in energy diplomacy. SeaEmploy breaks down what’s at stake.
The decree comes after years of fractured cooperation following the 2022 invasion of Ukraine. Now, the Kremlin seems ready to allow select Western firms back into its strategic offshore assets—if certain conditions are met.
Putin Oil & Gas – What the Directive Actually Says
On 15 August 2025, Putin signed Presidential Decree No. 637, which sets terms for foreign investors, including U.S. companies, to regain participation in Sakhalin‑1. The order authorizes the Russian government to issue approvals for “previous foreign shareholders” to reacquire their stakes under strict oversight.
Full Reuters coverage here
The directive outlines conditions:
- The investor must abide by Russian law, including new tax and regulatory frameworks.
- Foreign partners must supply necessary foreign equipment for continued oil production.
- All revenues must be processed via designated Russian financial channels.
This directive modifies earlier decrees from 2022, which had revoked Exxon’s operator status and transferred management to Rosneft’s affiliate, Sakhalinmorneftegaz-Shelf.
What Is Sakhalin‑1? History, Scale, and Strategic Role
Sakhalin‑1 is one of Russia’s most significant oil and gas projects, located off the northeastern coast of Sakhalin Island in the Sea of Okhotsk. It includes the Chayvo, Odoptu, and Arkutun-Dagi fields.
The project began in 1996 and was led by Exxon Neftegas Ltd., a subsidiary of ExxonMobil, holding a 30% stake. Other partners included:
- Rosneft (Russia)
- SODECO (Japan)
- ONGC Videsh (India)
Sakhalin‑1 was praised for engineering feats, including record-setting extended reach drilling. It once produced over 200,000 barrels of oil per day. But in 2022, ExxonMobil declared force majeure and exited due to Western sanctions, writing off an estimated $4.6 billion.
