US Treasury refuses to give Exxon drill waiver

THE Trump administration has denied a request from Exxon Mobil to waive US sanctions against Russia to allow the company to resume oil drilling around the Black Sea.

The request was hugely controversial as Donald Trump’s secretary of state, Rex Tillerson, is the company’s former CEO.

Treasury Secretary Steven Mnuchin said yesterday in a brief statement that the administration ‘will not be issuing waivers to US companies, including Exxon, authorising drilling prohibited by current Russian sanctions’.

Exxon said it understood the decision, while suggesting that the outcome will merely help European oil companies operating under less-stringent restrictions. The decision came 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 criticised in 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. Republican Senator John McCain tweeted of Exxon’s request, ‘Are they crazy?’

Secretary of State Rex Tillerson was Exxon’s CEO before joining President Donald Trump’s cabinet. While at Exxon, he cultivated close ties with Rosneft and Russian officials including President Vladimir Putin, and he spoke against sanctions that were imposed in 2014 in response to Russia’s annexation of the Crimea region of Ukraine.

The sanctions bar US oil firms from transferring to Russia the advanced technology that is used to drill more efficiently offshore and in shale formations. Exxon has said in regulatory filings that the sanctions could lead to losses of up to $1 billion.

An Exxon spokesman said the company’s application for a waiver was made to meet contractual obligations under a joint-venture agreement in Russia.