Exxonmobil announces further structural downsizing and exit from Russia

US oil company ExxonMobil announced it will cut its cost structure further than expected to boost future profits, shortly after joining the exodus of companies abandoning their projects in Russia.

The company, which returned to profit last year after making deep cuts, said in a note that by the end of 2023 it will have saved $9 billion a year in costs, $3 billion more than forecast, which would allow him to double his pre-pandemic earnings in 2027.

Late on Tuesday, ExxonMobil announced that it will not invest in new projects in Russia and that it is “taking steps” to exit its last production business, located in Sakhalin (east of the country), and which operates on behalf of a consortium of Japanese, Indian and Russian companies.

The oil company explained that it has begun “the process of interrupting operations” in the Sakhalin oil and gas platform, where it has a 30% stake and which after 25 years represents one of the largest international direct investments in Russia.

ExxonMobil rejected Russia’s “military action that violates the territorial integrity of Ukraine and endangers its people” and said it would comply with “all sanctions” imposed by the West in retaliation for the invasion ordered by the Russian president. Vladimir Putin.

The company got involved years ago in a legal battle with the United States government after it imposed sanctions against Russia after the annexation of Crimea due to its business with Igor Sechin, the chief executive of the Russian state-owned Rosneft, whose affiliates participate in Sakhalin.

ExxonMobil earned US$23 billion in 2021 and increased its liquidity to US$48 billion, which has allowed it to pay “almost all” of the debt accumulated during the pandemic after applying a harsh policy of cuts, and now plans to “benefit from the Economic recovery”.

In its note, the company said it plans to spend between $20 billion and $25 billion annually through 2027 on “low-cost-of-supply” extraction and exploration projects, and about $15 billion over the next few years. six years to reduce its greenhouse gas emissions.