US and Russian government officials discussed several energy deals on the sidelines of negotiations this month that sought to achieve peace in Ukraine, according to five sources familiar with the talks.
The proposals were put forward as incentives to encourage the Kremlin to agree to peace in Ukraine and for Washington to ease sanctions on Russia, they said.
Russia has been cut off from most international investment in its energy sector and from striking major deals due to sanctions imposed following the Ukraine invasion that began in February 2022.
Officials discussed the possibility of ExxonMobil reentering Russia’s Sakhalin-1 oil and gas project, three of the sources said. They also raised the prospect of Russia buying US equipment for its liquefied natural gas (LNG) projects, such as Arctic LNG 2, which is under Western sanctions, four sources said.
Exxon, the top US oil producer, has held numerous discussions with Russian state-controlled oil firm Rosneft about re-entering the project after receiving approval from the US Office of Foreign Assets Control under the administrations of both former president Joe Biden and President Donald Trump, said a separate source familiar with the matter.
None of the sources could be named because they were not authorized to speak publicly on the negotiations.
Another idea was for the US to buy nuclear-powered icebreaker vessels from Russia, Reuters reported on August 15
The talks took place during US envoy Steve Witkoff’s trip to Moscow earlier this month when he met Russian President Vladimir Putin and his investment envoy Kirill Dmitriev, three of the sources said. They were also discussed within the White House with US President Donald Trump, two of the sources said.
The deals were also briefly discussed at the Alaska summit on August 15, one source said.
“The White House really wanted to put out a headline after the Alaska summit, announcing a big investment deal,” said one of the sources. “This is how Trump feels he’s achieved something.”
Trump and his national security team continue to engage with Russian and Ukrainian officials toward a bilateral meeting to stop the killing and end the war, a White House official said in response to questions about the deals. It is not in the national interest to further negotiate these issues publicly, the official said.
A spokesperson for Dmitriev declined to comment.
ExxonMobil declined to comment. Rosneft and Novatek did not respond to requests for comment.
Talks coincide with threats
Trump has threatened to impose more sanctions on Russia unless peace talks make progress and to place harsh tariffs on India, a major buyer of Russian oil. Those measures would make it difficult for Russia to maintain the same level of oil exports.
Trump’s dealmaking style of politics has been on display before in the Ukraine talks, when earlier this year the same officials explored ways for the US to revive Russian gas flows to Europe
Those plans stalled after Brussels put forward proposals to phase out Russian gas imports entirely by 2027.
The latest discussions have shifted to bilateral deals between the US and Russia, moving away from the European Union, which as a bloc has been steadfast in its support for Ukraine.
On the same day as the Alaska summit, Putin signed a decree that could allow foreign investors, including ExxonMobil, to regain shares in the Sakhalin-1 project. It is conditional on foreign shareholders taking action to support the lifting of Western sanctions on Russia.
Exxon exited its Russian business in 2022 after the Ukraine invasion, taking a $4.6 billion impairment charge. Its 30% operator share in the Sakhalin-1 project in Russia’s Far East was seized by the Kremlin that year.
The US has placed several waves of sanctions on Russia’s Arctic LNG 2 project, beginning in 2022 and cutting off access to ice-class ships that are essential for year-round operations in the region.
The project is majority-owned by Novatek, which began working with lobbyists in Washington last year to try to rebuild relations and lift the sanctions.
The Arctic LNG 2 plant resumed natural gas processing in April, albeit at a low rate, Reuters reported. Five cargoes have been loaded from the project this year onto tankers under sanctions. A production train was previously shut down due to export difficulties caused by sanctions.
The project was intended to have three LNG processing trains. The third is still in the planning stage, with technology expected to be supplied by China.
Washington is seeking to prompt Russia to buy US technology rather than Chinese as part of a broader strategy to alienate China and weaken relations between Beijing and Moscow, one of the sources said.
China and Russia declared a “no-limits” strategic partnership days before Putin sent troops into Ukraine. Chinese President Xi Jinping has met Putin more than 40 times in the last decade, and in recent months Putin has described China as an ally.