© Reuters. FILE PHOTO: The logo of Exxon Mobil Corporation is shown on a monitor above the floor of the New York Stock Exchange in New York, December 30, 2015. Standard & Poor’s Ratings Services said on April 26, 2016, it had cut Exxon Mobil Corp’s corporate credit
By Florence Tan
(Reuters) -Exxon Mobil Corp said on Wednesday that its Russian unit Exxon (NYSE:) Neftegas Ltd has declared force majeure for its Sakhalin-1 operations, where it has become increasingly difficult to ship crude out of due to sanctions on Russia.
The Sakhalin-1 project produces oil off the coast of Sakhalin Island in the Russian Far East. Exxon is discontinuing its operations there following Russia’s invasion of Ukraine.
Project stakeholders, which include Exxon and India’s Oil and Corp, are having difficulty chartering tankers to ship oil out of a region that generally needs ice vessels to navigate the journey. That is because of growing concerns from shippers over reputational risk and the increasing difficulty for Russian assets to find insurance coverage.
“As a result, Exxon Neftegas Ltd has curtailed production,” a spokesperson said in response to an e-mail query from Reuters.