WSJ: Exxon in talks with Russian-owned oil company, Rosneft, about returning to Russia

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After huddling with President Trump in Alaska, President Vladimir Putin told reporters Russia and the U.S. could do more business together—for example, between their Pacific coastlines.

“We look forward to dealing,” Trump replied.

What the two leaders didn’t say: Behind closed doors, their countries’ biggest energy companies had already sketched out a road map to going back into business, pumping oil-and-gas fields off Russia’s far-east coast.

In secret talks with Russia’s biggest state energy company this year, a senior Exxon Mobil executive discussed returning to the massive Sakhalin project if the two governments gave the green light as part of a Ukraine peace process, said people familiar with the discussions.

Such is the sensitivity that only a handful of people at Exxon knew the talks had taken place. One of the U.S. oil major’s top executives, Senior Vice President Neil Chapman, led the talks on the Exxon side.

Under the Biden and Trump administrations, Exxon and other companies have had U.S. permission and licenses from the Treasury Department to hold talks about stranded assets with Russian counterparts, one of the people familiar with the discussions said. The first round of negotiations took place shortly after Exxon’s exit from Russia in 2022.

In parallel, Exxon executives have asked the U.S. government for support if the company goes back to Russia, and received a sympathetic hearing, said a senior administration official. CEO Darren Woods discussed Exxon’s possible return with Trump at the White House in recent weeks.

Resuming business in Russia would mark a dramatic rapprochement after Exxon’s messy breakup with Moscow when Putin attacked Ukraine in 2022. The West’s biggest oil producer dived deeper into Russia than most other companies after the fall of the Soviet Union. Its retreat after the invasion was correspondingly more acrimonious.

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Enticing Exxon back would represent a coup for the Kremlin, which wants to draw Western investment as part of the peace talks to stabilize the economy. A return isn’t guaranteed and depends in part on whether Trump succeeds in brokering an end to the Ukraine war, or instead tightens sanctions if Putin refuses to stop fighting.

Russia’s oil industry has managed to keep oil production high despite sanctions, but analysts say production capacity will eventually erode by lack of know-how and investment. Ukrainian drone strikes on refineries and pipelines have hampered the country’s domestic fuel supplies in recent weeks.

Discussions between Exxon and Rosneft about rebooting their partnership intensified around the time of Trump’s inauguration this January.

In February, senior U.S. and Russian government officials met publicly in Riyadh, Saudi Arabia, to open talks about ending the war. At the time, Russia dangled the promise of investment opportunities for American companies, including in Arctic energy developments.

Privately, Exxon’s Chapman met Rosneft CEO Igor Sechin in the Qatari capital Doha, some of the people familiar with the discussions said. Sechin, a close ally of Putin, is under blocking sanctions by the U.S., which means Americans are mostly banned from dealing with him without the type of Treasury license obtained by Exxon.

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Putin removed one obstacle to Exxon’s return the same day as the Alaska summit. He signed a decree allowing foreign companies to own shares in the Russian firm that has operated Sakhalin since Exxon’s departure. Conditions include providing overseas equipment and spare parts, and lobbying for sanctions to be repealed.

Exxon’s re-entrance will likely depend on the terms that Russia offers. The company is looking to recoup losses from its Sakhalin exit, at least, some of the people familiar with the discussions said.

Exxon’s close ties with Russia—a commodities superstore—earned then-CEO Rex Tillerson an Order of Friendship from Putin in 2013. Sanctions imposed after Putin annexed Crimea the next year forced Exxon out of some of its Russian ventures, but Sakhalin was unscathed.

Despite the tension after the 2022 invasion, Exxon has maintained back-channel communications with state-owned Rosneft throughout the war, said some of the people familiar with the discussions.

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If it goes back, Exxon would find a different environment for doing business. Russia’s economy has slowed under the pressure of sanctions, high interest rates and inflation. Asset seizures by the state are commonplace. And in wartime the Kremlin has taken even greater control of the country’s vast energy industry.

The market for Russia’s oil has changed. Europe has weaned itself off Russian crude, while refiners in India and China have snapped it up. The traders who buy and sell the oil mostly do so through opaque companies in the United Arab Emirates.

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