Exxon seeks OK to resume Russian oil venture
AP, Apr 19 2017
FASCHINGSTEIN – Exxon Mobil is seeking permission from the Pindosi government for approval to resume drilling around the Black Sea in partnership with Rosneft, according to a person familiar with the matter. The oil giant’s request is being reviewed by the Trump administration and is certain to draw extra scrutiny because it involves a company formerly run by Sec State Tillerson. The drilling venture was blocked when Pindostan imposed sanctions on Russia in 2014. Exxon applied to the Treasury Dept for a waiver from the sanctions in 2015, during the Obama administration. Exxon has publicly disclosed licenses for other work in Russia that required waivers. A State Dept spox said Tillerson has recused himself from any matters involving Exxon for two years, and is not involved with any decision involving the company before any government agency. Tillerson retired as Exxon CEO at the end of last year. Exxon disclosed in regulatory filings in 2015 and 2016 that it received three licenses from the Treasury Dept’s Office of Foreign Assets Control (OFEC) to conduct “limited administrative actions” with Rosneft. The company said it was complying with all sanctions regarding investments in Russia. Among other things, companies were prohibited from transferring advanced technology used to drill offshore and in shale formations. Exxon was ordered to stop drilling in the Kara Sea off Russia’s northern coast. The head of Exxon’s Russian partner, Rosneft, was personally blacklisted. As Exxon CEO, Tillerson opposed the sanctions, telling shareholders in 2014 that sanctions were usually ineffective and caused very broad collateral damage. Tillerson and Exxon agreed to the venture with Rosneft in 2011. The Russia sanctions have cost the company hundreds of millions of dollars. Exxon reported in 2015 that its potential losses related to the Rosneft venture could run to $1b. If the sanctions are lifted Exxon could push ahead with lucrative exploration and production opportunities in the Black Sea, Siberia and the Russian Arctic. Exxon’s ambitions could be complicated by concern over what the intelligence agencies have concluded were Russian cyber-attacks to interfere with the presidential election last year. Congress is also investigating possible ties between aides to then-candidate Trump and Russian officials (specifically, Rosneft- RB). Exxon’s critics said that if the Trump administration approved Exxon’s request, which was reported first by the WSJ, then Congress should block it on grounds of environmental and national interest.