Exxon to pull out of Russian partnership

MOSCOW — Exxon Mobil will end a joint venture with Russia’s state-controlled Rosneft because of U.S. and European sanctions against Moscow.

Exxon revealed in a regulatory filing that it decided to end the partnership late last year after the U.S. expanded sanctions against Russia. The company plans to begin unwinding the joint venture this year.

The retreat will result in an after-tax loss of about $200 million. Exxon reported a 2017 profit of $19.7 billion.

But ending the partnership with Rosneft appeared to dash Exxon’s hopes of drilling in the potentially oil-rich Russian Arctic, and it erases some of the legacy of Secretary of State Rex Tillerson, the one-time Exxon chairman and CEO.

Tillerson signed a deal with Rosneft, Russia’s biggest oil producer, in 2011 with hopes of drilling in the difficult terrain of Russia’s Arctic waters. The partnership would combine Exxon’s technological expertise with Rosneft’s access to the area.

The deal came under strain, however, after the U.S. sanctioned Russia in 2014 over the invasion of Ukraine and annexation of the Crimean Peninsula. The sanctions did not affect existing energy deals, but they prohibited any business with Rosneft CEO Igor Sechin, an influential oligarch in Russia with whom Tillerson reportedly has had close personal ties.