Massive US-based oil company Exxon-Mobil will not be getting a waiver from the Treasury Department allowing them to participate in joint drilling operations with Russian-based oil company Rosneft. Exxon had previously been given waivers in 2015 and 2016.
The US sanctions barring Exxon-Mobil from drilling for oil in Russia were part of a 2014 series of sanctions by the US and the European Union, though as Exxon was quick to point out, the sanctions would still allow EU-based companies to operate in Russia, putting the major US company at a competitive disadvantage.
Russia, and Siberia in particular, are seen as a huge growth market for oil production, and while it’s certain Russian companies like Rosneft will be key in the buildup, the experience of large multi-nationals like Exxon-Mobil is a big opportunity for them to get involved in the production ramp-up.
The Treasury Department’s refusal to grant Exxon-Mobil a waiver is particularly noteworthy because the Exxon CEO who managed to get waivers iin 2015 and 2016, Rex Tillerson, is the current US Secretary of State, and would seemingly be in a position to influence such a move.
The denial may be intended to prevent claims of a conflict of interest, but it also risks doing serious harm to major US oil producers, cutting them off from Russia at a time when they are already facing a disadvantage to the rest of the world by being prevented from making deals in the other big source of oil production investment, Iran.