07/01/2022, 11.18
RUSSIA
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Foreign companies flee Sakhalin Island over Ukraine war

by Vladimir Rozanskij

Due to Western sanctions, ExxonMobil and Shell withdrew their investments in the local oil industry. They were not only funding mining, but also projects in education, health and culture. Residents speak of contribution to the growth of local civil society.

Moscow (AsiaNews) - All foreign investors in oil extraction, on which much of the region's business and economy depends, are leaving Sakhalin Island. As early as a week after the Feb. 24 invasion of Ukraine, ExxonMobil said it would pull out of the Sakhalin-1 project, in which it was the main sponsor with its subsidiary Exxon Neftegaz Limited" and would not pursue investment in Russia. Shell, on the other hand, announced its exit from Sakhalin-2.

The two companies covered only 30 percent of the total shares, and representatives of other Asian states said they were willing to buy Exxon's shares. In reality, the U.S. and British oil companies were financing not only mining, but also a large number of projects in education, health and culture, which will now end,  impoverishing the lives of the inhabitants of the large Russian island on the Pacific.

Russian oil company workers learned of their fate from the Western press, without being notified of any changes, unlike so many employees of Western firms that joined the sanctions, whose workers were officially put on unlimited free layoffs "na prostoe" as they say in Russia ("in the simple state"). Despite the West's response to the war, these businesses were expected to remain shielded from consequences, as they did after the 2008 events in Georgia and 2014 events in Ukraine itself.

Oil prices skyrocketed, and no one thought such lucrative installations would be abandoned. After some assurances from Houston, Exxon Neftegaz President Shelly Boure convened an extraordinary general meeting, and with tears in her eyes announced the withdrawal from Sakhalin.

In two days, several hundred foreign employees left in a hurry, packing the bare minimum. The village of Olympia, built for Exxon foreigners, is now a wasteland where children's bicycles remain on the streets, and in the houses all the technology and electronics, which perhaps later will be sent to their rightful owners.

Some mixed families have abruptly separated, with the partner of Russian nationality with whom relations were not quite official left at home. Throughout Sakhalin there is the impression of an apocalyptic catastrophe, as residents tell Sibir.Realii, "We used to live a secure life full of comfort, now we no longer know how to pay our bills and our future is uncertain." Some officials from Russia's Rosneft came to make an inspection, assuring that "everything will be as before, and even better," and then disappeared.

Now it appears that Exxon's shares will be bought by some Indian companies, with the backing of Rosneft itself, but no official announcements have been made. The more than 100 social projects were committing the company to more than two million dollars a year, and no guarantee of recovery has been given for these.

One of the most important initiatives is the "Boomerang Club," which is concerned with the "development of human relationship and protection of the environment through ecological and educational activity, tourism and entertainment activity, creative work of children and youth of the Sakhalin region," founded again in 1998. Its president Valentina Mezentseva despairs over the departure of Americans and British, "who have done so much for the growth of civil society in our land."

For years the club has been organizing adventure trips for youngsters using everything from gliders to kayaks, including "whale night" on boats for what is called the "School of Nature," an experience so advanced that it is being modeled in many other parts of the world. War not only destroys things and people, but also manages to erase their souls.

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