Save for later Print Download Share LinkedIn Twitter President Vladimir Putin has signed an order that transfers management of the Sakhalin-1 project in Russia's Far East from Exxon Mobil to Russian oil giant Rosneft, raising the likelihood of a legal row between Moscow and Exxon. The order also provides for the creation of a new Russian-registered operating company for the Sakhalin-1 production sharing agreement (PSA) — a step that was previously taken at the Sakhalin-2 project. Up to now, Exxon had been the sole operator of Sakhalin-1 — via a Bermuda-based operating company — with a 30% stake in the project. The move signals a clear impasse between Moscow and Exxon over the management of the strategic Russian asset. The two have been at loggerheads over the past several months as production at Sakhalin-1 fell to minimal levels of around 5,000-10,000 b/d from more than 200,000 b/d in April. Sources say Exxon insisted the winding down of operations was necessary after Western sanctions forced it to declare force majeure in May. However, its Russian partners have questioned Exxon's inability to market and place Sakhalin crude despite these challenges. There has been a strong push by Russian authorities to increase production at Sakhalin-1, which is important for the Sakhalin region's budget revenues and as a source of associated gas.