Tillerson’s rise boosted by savvy in Russian oil
chicago» For Rex Tillerson, Russia was the proving ground that helped vault him to leadership of a company whose annual sales dwarf the economic output of most nations.
Tillerson, Exxon Mobil Corp.’s chairman and chief executive officer since 2006, has emerged as President-elect Donald Trump’s pick for secretary of state despite, or perhaps because of, a long record of engagement with America’s former Cold War adversary. In the late 1990s, when serving as a vice president for Exxon’s Russian unit, Tillerson helped revive a $17 billion oil development in a remote region east of Moscow that had been stalled by bureaucratic inaction for most of a decade.
The project, which tapped a cluster of oil discoveries beneath the icechoked seas off Russia’s Far East, became a crown jewel in Exxon’s global portfolio, pumping hundreds of millions of barrels of crude since the first wells came online in 2005. The achievement burnished a résumé already chock-full of successes helping direct Exxon’s forays in the Middle East and Southeast Asia.
“Russia made his career,” Joseph Pratt, a University of Houston oil-industry historian, said in a 2015 interview. Tillerson’s success in turbulent late ’90s Russia “really impressed” Exxon’s leadership team at corporate headquarters in Irving, Texas.
Tillerson joined Exxon in 1975 after graduating from the University of Texas with a civil engineering degree. If confirmed as secretary of state, he would be the first oil executive and only the second Texan to hold the office. And it would hand top diplomatic powers to a man whose ties to Russian President Vladimir Putin go back to 1999. An official announcement of his nomination is expected today.
Exxon spokesman Alan Jeffers declined to comment on Tillerson or the company’s succession plan, although the chief executive will hit Exxon’s mandatory retirement age of 65 in March.
Exxon’s board promoted Tillerson to president in 2004, signaling he was in line to succeed Lee Raymond as chairman and CEO. Tillerson was a surprise pick at the time, edging out older rival Edward Galante for the top job in an organization that puts a premium on experience, said John Stuart, a former vice chairman of Guaranty Bank in Dallas and friend of several prominent Exxon executives. Tillerson formally assumed the CEO role in January 2006.
“Rex came out of nowhere in that organization,” Stuart said in 2006. “He was like a rocket.”
Tillerson’s relationship with Russia evolved in the years following the Soviet Union’s collapse in 1991. It was a time when Exxon saw its efforts to explore oil-rich zones in Russia’s interior frustrated by bureaucratic hurdles, including the inability to garner permits or drilling licenses.
In response, in-country executives including Tillerson decided to pursue a “peripheral strategy” that focused on projects on the nation’s edges, close to ports that could export crude as soon as it was pumped out of the ground, according to Pratt.