WASHINGTON – The U.S. Treasury Department announced Friday that it had denied Exxon Mobil’s request for a waiver of sanctions on Moscow that prevent U.S. companies from oil drilling in Russia.
“In consultation with President Donald J. Trump, the Treasury Department will not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions,” U.S. Secretary of the Treasury Steven Mnuchin said in a terse, single sentence statement.
Several media outlets reported Thursday that Exxon Mobil had requested a waiver from sanctions from the U.S. Treasury Department in order to resume its drilling partnership with Russian state-owned oil company Rosneft.
“I am shocked and disappointed to hear that Exxon Mobil is seeking, and the Treasury Department is considering, waiving sanctions against doing business with Russia," said U.S. Senator Ben Cardin (D-Md.), Ranking Member of the Senate Foreign Relations Committee, before the decision was announced. "“There can be only one response to such a request – a categorical rejection."
“Those sanctions were imposed for the most serious violations of international law when Russia invaded Ukraine and later annexed Crimea. Russia continues to ignore international condemnation, and is escalating hostilities in Eastern Ukraine to press for further military advantage. In light of Russia’s complicity in war crimes in Syria as well as its flagrant interference with our basic democratic institutions and those of our European allies, our sanctions should be strengthened and extended," said Cardin.
“Given Russia’s well-documented and troubling activities around the world, it is troubling Exxon Mobil would continue to press for its narrow economic advantage at the expense of our national interests. The deals they are seeking would put money in the pockets of Russian oligarchs and the Russian treasury, guaranteed to be used against America, our interests, and our allies," Cardin concluded.
In 2012, ExxonMobil and Russia's Rosneft signed an agreement to invest up to $500 billion in developing Russia's vast energy reserves in the Arctic and Black Sea.
The deal, between the world's largest listed oil firm and the world's top oil producing nation, was the product of nearly a year of talks but was halted by sanctions that the U.S. Treasury placed on Russia, Rosneft and Rosneft CEO Igor Sechin in the wake of Russia's invasion of Ukraine and seizure of Crimea.
Under the deal, Exxon and Rosneft were to develop three fields in the Arctic with recoverable hydrocarbon reserves estimated at 85 billion barrels in oil-equivalent terms.
They created a joint venture that was to invest an initial $3.2 billion into exploring the Kara Sea and Black Sea.
Rosneft had two-thirds stake in the venture, while Exxon owned a third but was to shoulder the initial exploration costs.
Rosneft was also to get 30% stakes in Exxon-led projects to develop hard-to-recover reserves in West Texas, the Canadian province of Alberta and the U.S. Gulf of Mexico.