MOSCOW, September 29. /TASS/. The Russian government has approved the procedure for the valuation and sale of Exxon's stake in the new operator of the Sakhalin-1 oil and gas project.

The rules state that only a Russian legal entity that meets certain criteria and bids the highest will be eligible to receive it. The decree to that effect - a copy of which is available to TASS - was signed by Russian Prime Minister Mikhail Mishustin on September 28.

According to the rules, Exxon's stake will be valued by an independent appraiser (B1-Consult) and approved by the Russian government. After that the Federal Property Management Agency facilitates the sale of the stake in the authorized equity of Sakhalin-1 LLC (the project’s operator). The agency will select the buyer based on who makes the highest bid. Any Russian legal entity that meets the criteria approved by the government can participate in the bidding.

If only one company submits an application or only one legal entity is recognized, there will be no selection process, and this company will take the stake at the starting price (that is, the assessment of Exxon’s stake in Sakhalin-1 approved by the Cabinet of Ministers).

In April, President Vladimir Putin signed a decree to extend the deadline for the sale of Exxon's stake in the Sakhalin-1 project until fall 2023. Initially, it was decided that if a foreign company withdraws from the project and decides not to transfer its stake, the Russian authorities are to evaluate and sell this stake within 4 months. Now, by a decree dated April 5, this period has been extended by 12 months until mid-November of this year.

In fall 2022, the Russian authorities transferred the operator of the Sakhalin-1 project to Russian jurisdiction. LLC Sakhalin-1, registered in Yuzhno-Sakhalinsk, took over for Exxon Neftegaz as the project’s operator. Sakhalinmorneftegaz-shelf, a subsidiary of Rosneft, became the operating company of Sakhalin-1 LLC.

The new project operator, LLC Sakhalin-1, was registered on October 14, 2022. The Russian government allowed the transfer of a 20% stake in Sakhalin-1 to the Indian ONGC Videsh Limited, as well as a 30% stake to the Japanese Sakhalin Oil and Gas Development Co. Ltd. (Sodeco). Rosneft holds 20% in the project. The stake of Exxon Neftegas (subsidiary of ExxonMobil) was 30%, but it announced its withdrawal from the project in March 2022.