Russian President Vladimir Putin on Friday signed a decree establishing a new operator of the Sakhalin-1 oil and gas project in the Russian Far East, led by Exxon Mobil, News.ro reported with reference to Reuters.

Putin’s move, which affects Exxon’s largest investment in Russia, mimics the strategy he has used to seize control of other energy facilities in the country.

The decree gives the Russian government the authority to decide whether foreign shareholders can retain stakes in the project.

Exxon owns 30% of the shares of Sakhalin-1, the partners of which are the Russian company Rosneft, ONGC Videsh from India and SODECO from Japan.

Oil production at the Sakhalin-1 project fell to just 10,000 barrels per day in July from 220,000 barrels per day before Russia’s invasion of Ukraine.

Following international sanctions imposed on Moscow, Exxon has been trying to exit its Russian operations since March and transfer its role at Sakhalin-1 to a partner.

The Russian government and Exxon disagreed, and the oil producer threatened to take the case to international arbitration.

Exxon declined to comment on Friday’s order.

Japan’s SODECO Group was not available for comment, Reuters reported, but a spokesman for the industry ministry, which owns 50 percent of the company, said it was gathering information and talking to partners.

Japan has stopped buying crude oil from Russia since June.

Putin used a similar strategy in a July decree to gain full control of Sakhalin-2

In April, Exxon recorded a $4.6 billion impairment loss on its Russian operations and said it was working with partners to transfer Sakhalin-1 operations. It also reduced energy production and moved personnel out of the country.

In August, Putin issued a decree that Exxon said made an environmentally safe exit from Sakhalin 1 more difficult.

After that, the American manufacturer issued a “note of differences”, a legal step before arbitration.

Friday’s resolution says the Russian government will establish a Russian company under the management of Rosneft’s subsidiary Sakhalinmorneftegaz-Shelf, which will hold the rights of investors in Sakhalin-1.

The foreign partners will have one month after the creation of the new company to ask the Russian government for a stake in the new enterprise, the decree said.

Putin used a similar strategy in a July decree to gain full control of Sakhalin-2, another oil and gas project in the Russian Far East, in which Shell and Japanese companies Mitsui & and Mitsubishi are partners.

Russia has approved requests from two Japanese companies that want to transfer their stake to a new operator.

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