Exxon Abandons Russian Projects Brokered by Tillerson
March 01 2018 - 5:07AM
Dow Jones News
By Michael Amon
Exxon Mobil Corp. is ending projects with Russia's
state-controlled energy giant, PAO Rosneft, because of
international sanctions on Moscow, abandoning signature
achievements of former chief executive, Secretary of State Rex
Tillerson.
Exxon said it decided last year to withdraw after the U.S.
government imposed new sanctions on Moscow for its alleged
interference in the 2016 presidential election. Those penalties
came on top of U.S. and European sanctions on Russia over its
actions in Ukraine.
The withdrawal for now marks the end of Exxon's hopes of
drilling in Russia's Arctic ocean oil fields, considered one of the
world's great unexplored oil and gas basins. Exxon drilled one
exploration well that it said produced promising results, but had
to halt work because of sanctions. Exxon had hoped drilling could
restart in the future, either with the blessing of the Trump
administration or the eventual lifting of sanctions.
Mr. Tillerson had clinched those deals in 2011 and 2012,
arrangements that were overseen personally by President Vladimir
Putin. Mr. Tillerson later received the Order of Friendship, the
highest honor Russia can bestow on a foreigner.
Exxon's involvement in Russia drew condemnation from the U.S.
government, as the deals came at the height of the crisis over
Moscow's involvement in Ukraine, including its annexation of
Crimea.
The U.S. Treasury Department last year imposed a $2 million fine
on Exxon for what it called a "reckless disregard" of American
sanctions on Russia while Mr. Tillerson was chief executive. The
deals were signed by a Putin confidant, Rosneft Chief Executive
Igor Sechin, who was targeted by sanctions.
Exxon called the fine "outrageous," saying it was contrary to
guidance given by the Obama administration. The company has
challenged the fine in federal court.
President Donald Trump also dealt Exxon's Russian ambitions a
blow last year, declining to waive sanctions for the company's
Rosneft ventures.
Exxon announced the end of the joint ventures in a regulatory
filing late Wednesday. It said it would formally begin to withdraw
from the Rosneft joint ventures this year, taking a $200 million
loss on them after taxes.
Write to Michael Amon at michael.amon@wsj.com
(END) Dow Jones Newswires
March 01, 2018 04:52 ET (09:52 GMT)
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