US Won’t Override Sanctions for ExxonMobil
The US government will not allow ExxonMobil to bypass US sanctions against Russia to resume drilling for oil in a joint venture with Moscow-based Russian oil group Rosneft. The oil and petrochemicals group’s initial request was made in 2015, at a time when current Secretary of State, Rex Tillerson, was CEO, and several additional requests have followed, according to the US Securities and Exchange Commission, SEC.
Rejection of Exxon’s bid to continue work in Russia was reportedly made on orders of from the White House. “In consultation with President Donald J. Trump, the Treasury Department will not be issuing waivers to US companies, including Exxon, authorizing drilling prohibited by current Russian sanctions,” Treasury Secretary Steven Mnuchin said in a statement.
Both Democratic and Republican members of the US Congress have gone on record as opposing the waiver of sanctions.
In a statement of its own, ExxonMobil said it “understands” the government’s position, adding that “the 2015 application for a license under the provisions outlined in the US sanctions was made to enable our company to meet its contractual obligations under a joint venture agreement in Russia, where competitor companies are authorized to undertake such work under European sanctions.”
The group is sad to be angered that the US sanctions “grandfather” agreements predating the sanctions, whereas the EU’s sanctions do not. Italian rival Eni has been allowed to continue exploring the Russian sector of the Black Sea for oil, and it is now said to be poised to take the US group’s place in the deepwater exploration project.
The US-Russian collaboration dates back to 2011, when then-CEO Rex Tillerson signed a cooperation plan with Rosneft that Russian President Vladimir Putin said would eventually invest as much as $500 billion. Along with exploring for crude, ExxonMobil was eager to tap shale gas reserves in Russia's Arctic, Black Sea and Siberian regions All work was stopped in 2014, when the US and the EU imposed sanctions punishing Russia for annexing the Crimean peninsula and backing Ukrainian separatists.
Political observers have suggested that Trump is keen to avoid showing any signs of cooperation with Russia at a time when US intelligence agencies have accused it of covertly intervening in last year’s election on the new president’s behalf. The US Congress is also probing alleged ties. The Russian government honored Tillerson in 2012 with the country’s Order of Friendship decoration for his services to the country.