Political Path Narrows for Exxon Deal With Russian Firm
April 20 2017 - 8:00PM
Dow Jones News
By Bradley Olson and Jay Solomon
When President Donald Trump picked Rex Tillerson, the chief
executive of Exxon Mobil Corp., to be his secretary of state, some
oil analysts assumed the appointment signaled a potential revival
of the firm's halted partnership with Russia.
Four months later, with Exxon now seeking a waiver from U.S.
sanctions to allow it to drill with Russian state-oil giant PAO
Rosneft in the Black Sea, the political path for such an
opportunity appears to be narrowing significantly.
Congress and the Federal Bureau of Investigation continue to
probe ties between aides to Mr. Trump and Russia's government. Many
lawmakers back expanded sanctions in response to assessments by the
U.S. intelligence community that Moscow interfered in the U.S.
presidential election.
"While a waiver to allow business with prohibited Russian
entities may be in Exxon Mobil's interest, it would clearly not be
in America's national security interest," Sen. Marco Rubio (R.,
Fla.) a member of the Senate Foreign Relations Committee, said in a
statement to The Wall Street Journal.
Mr. Rubio joined other members of Congress -- of both parties --
in urging the Trump administration to reject Exxon's request to the
Treasury Department's Office of Foreign Assets Control, saying
Russia hasn't done anything to merit the loosening of sanctions.
Exxon's request was floated in 2015 and renewed in March, according
to a person familiar with the matter.
" Vladimir Putin has taken no steps that would merit the removal
of any sanctions," Sen. Bob Menendez (D., N.J.) said in a statement
Thursday.
"The last thing the United States should be doing is clearing
the way for lucrative new business opportunities for Putin and his
cronies," said Rep. Eliot Engel (D., N.Y.), the top-ranked Democrat
on the House Committee on Foreign Affairs.
"Are they crazy?" was the message put up on Twitter on Wednesday
by Sen. John McCain (R, Ariz.), the chairman of the Senate Armed
Services Committee, in response to the news of Exxon's waiver
request.
Mr. Rubio and Republican Sens. Lindsey Graham of South Carolina
had both expressed reservations about Mr. Tillerson's nomination to
be Secretary of State before voting to confirm him. A spokesman for
Mr. Graham said he was unavailable.
Neither Exxon nor the U.S. Treasury Department would comment on
the waiver request. State Department officials noted Mr. Tillerson
has pledged to recuse himself for two years from any issue
involving his former company.
Exxon has sought permission to drill in Russia's Black Sea
waters since mid-2015, a request the Obama administration didn't
approve. Exxon is wary of the efforts of rivals such as Italian oil
company Eni SpA and Norway's Statoil ASA to continue to explore
Russian prospects despite European Union sanctions.
Exxon has until the end of the year to drill in the Black Sea,
according to its agreement with Rosneft. It can obtain a license to
operate only if it makes a discovery, a possibility that will
become increasingly unlikely if Treasury doesn't grant a waiver
soon.
Mr. Tillerson said earlier this month that U.S.-Russia relations
had reached a "low point," in comments following U.S. bombing of a
Syrian air base in response to the regime's apparent use of
chemical weapons.
Write to Bradley Olson at Bradley.Olson@wsj.com and Jay Solomon
at jay.solomon@wsj.com
(END) Dow Jones Newswires
April 20, 2017 19:45 ET (23:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Exxon Mobil (NYSE:XOM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Exxon Mobil (NYSE:XOM)
Historical Stock Chart
From Sep 2023 to Sep 2024