ExxonMobil and TotalEnergies rule out new Russia projects

ExxonMobil is in the process of discontinuing operations and developing exit plans with the Sakhalin-1 venture following Russia's invasion of Ukraine

ExxonMobil and TotalEnergies will not invest in new developments in Russia.

ExxmonMobil said it is in the process of discontinuing operations and developing exit plans with the Sakhalin-1 venture.

It joins a lengthening list of energy majors - such as Shell and bp - in cutting ties with Russia following the Ukraine invasion. In a statement it said 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," it said. "We are deeply saddened by the loss of innocent lives and support the strong international response. We are fully complying with all sanctions.

ExxonMobil operates the Sakhalin-1 project on behalf of an international consortium of Japanese, Indian and Russian companies.

"As operator of Sakhalin-1, we have an obligation to ensure the safety of people, protection of the environment and integrity of operations," the statement added. "Our role as operator goes beyond an equity investment. The process to discontinue operations will need to be carefully managed and closely coordinated with the co-venturers in order to ensure it is executed safely."

The company aims to save US$9bn a year by 2023 compared to 2019, it said in a separate announcement at its Annual Investor Day.

To improve future earnings, ExxonMobil is upgrading its portfolio with low-cost-of-supply opportunities by investing in advantaged assets, including Guyana and the US Permian Basin. It is also investing in competitively advantaged chemicals and downstream projects, including Gulf Coast Growth Ventures, to grow high-value product sales of performance products and lubricants.

It expects capital investments of US$21-$24bn in 2022 and US$20-$25bn per year through 2027. 

To further support its ambitions for net zero Scopes 1 and 2 greenhouse gas emissions across major operated assets by 2050, Exxon Mobil is planning a world-scale blue hydrogen plant at its integrated refining and petrochemical complex in Baytown, Texas.

The new plant could generate up to 1bn cubic feet of hydrogen per day, delivering low-carbon fuel to the Baytown olefins plant and other Houston-area facilities. 

Replacing natural gas with hydrogen at the Baytown olefins plant could reduce the integrated complex’s CO2 emissions by up to 30% compared to current operations. The International Energy Agency sees hydrogen and hydrogen-based fuels meeting 10% of global energy needs as part of its Net Zero by 2050 scenario.

TotalEnergies condemned Russia's military aggression and said it supports the scope and strength of the sanctions put in place by Europe and will implement them "regardless of the consequences (currently being assessed)" on its activities in Russia. But its statement fell short of announcing a full withdrawal from Russia.

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