Sun, Apr 23, 2017 - Page 16 News List

US rejects Exxon Mobil request to drill in Black Sea


US President Donald Trump’s administration has rejected a request from Exxon Mobil Corp to waive US sanctions against Russia to allow the company to resume oil drilling around the Black Sea.

US Secretary of the Treasury Steven Mnuchin on Friday said in a brief statement that the administration “will not be issuing waivers to US companies, including Exxon, authorizing drilling prohibited by current Russian sanctions.”

Exxon said it understood the decision, while suggesting that the outcome would merely help European oil companies operating under less-stringent restrictions.

The decision comes just two days after it was reported that Exxon was seeking a waiver to resume a joint venture with Rosneft, a Russian state-owned oil company. Exxon said it filed the request in 2015.

The disclosure of Exxon’s application was criticized in US Congress by lawmakers who said the Trump administration should not reduce sanctions after US intelligence agencies concluded that Russia interfered in last year’s presidential election.

US Secretary of State Rex Tillerson was Exxon’s chief executive officer before joining Trump’s Cabinet. While at Exxon, he cultivated close ties with Rosneft and Russian officials including Russian President Vladimir Putin, and he spoke against sanctions that were imposed in 2014 in response to Russia’s annexation of Crimea.

An Exxon spokesman said the company’s application for a waiver was made to meet contractual obligations under a joint-venture agreement in Russia, “where competitor companies are authorized to undertake such work under European sanctions.”

Rosneft officials have said that their joint venture with Italy’s Eni SpA plans to begin drilling this year in the Black Sea next to the area where Exxon hoped to drill.

Under US Department of the Treasury rules, Exxon Mobil could resubmit its application if it provides additional information the government had not reviewed previously.

Exxon’s critics urged the department to block more waivers, which they feared would give new momentum to drilling in the environmentally sensitive Russian Arctic.

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