On April 16, 2012, ExxonMobil and Rosneft signed a strategic cooperation agreement that opened American domestic oil and gas fields to Russian investment. The agreement gave Rosneft the right to acquire a 30 percent stake in ExxonMobil projects in the Gulf of Mexico, West Texas and Canada.
On April 16, 2012, ExxonMobil and Rosneft signed a strategic cooperation agreement that opened American domestic oil and gas fields to Russian investment. The agreement gave Rosneft the right to acquire a 30 percent stake in ExxonMobil projects in the Gulf of Mexico, West Texas and Canada. At the time, experts of the Committee for Russian Economic Freedom were concerned that such an agreement would at least legitimize Rosneft as the recipient of assets that had been extorted from Yukos. In 2012, former Yukos assets made up more than three-quarters of Rosneft’s value.
In 2014, Western countries have begun introducing economic sanctions against Russia in response to the latter’s violating Ukrainian sovereignty. In April 2014, the United States not only banned Rosneft CEO Igor Sechin from entering the U.S. but basically forbade U.S. companies from dealing with Rosneft which made the close cooperation between ExxonMobil and Rosneft look weird to say the least. However, “…this did not prevent ExxonMobil and Rosneft from starting to drill an exploratory well in the Arctic Kara Sea on August 9. Sechin and ExxonMobil Russia President Glenn Waller were at the platform, and President Putin gave the signal to start drilling via teleconference from Sochi.” Specialists explained such behavior of the major oil company by strong lobbying leverage in the United States.
Therefore, a couple of awkward questions arise, such as if ExxonMobil was violating the U.S. sanctions by signing agreements with Sechin, and if the company was using corruption mechanisms in Russia along with a powerful state lobby in the United States. OFAC, an office of the US Department of the Treasury responsible for overseeing sanctions, emphasized that “sanctions in general terms prohibit any transactions in which a blocked individual or entity participates directly or indirectly even if this individual or entity is acting on behalf of the non-blocked entity.” U.S. companies have no right to enter into agreements that are signed by individuals or entities included in sanctions lists.
Thus, ExxonMobil stopped work on nine of their ten projects in Russia in compliance with the sanctions regime.
However, Texas oil businessmen never give up. According to experts close to the company’s strategy, ExxonMobil is already trying to convince the U.S. government to soften sanctions in order to resume Arctic shelf drilling next summer. In their opinion, these plans can be easily explained by the fact that ExxonMobil expected its joint ventures with Russia to bring the company at least $50 billion in revenues in the next few years. This seems to be worth fighting for regardless of the expropriation of Yukos, the annexation of Crimea, and the non-declared war in Ukraine’s eastern regions. For ExxonMobil, Rosneft’s money has no smell.
