Exxon and Russia’s state-oil company have recently inked a deal to tap billions of barrels of crude oil in Russia; despite sanctions passed against the Kremlin by both the United States and the European Union. However, the Western entities have over the weekend responded by closing a loophole in the sanctions, in hopes to shut down the partnership for good.
The U.S imposed new sanctions that gave American businesses two weeks to shut down all drilling, testing, and exploration in Russian territory. The EU signed off on restrictions that would allow for remaining contracts to be upheld, but as of this week there are no preeminent European companies drilling in Russia.
In August, Exxon and Russian state-owned OAO Rosneft broke ground at an Arctic oil well; using a loophole to supercede recently passed US and EU sanctions, Bloomberg reported. According to both US and EU officials, the Texas-based Exxon, although it was not technically violating any laws, had conducted unethical and unpatriotic business practices by violating sanctions.
David Kramer, the president of Freedom House, told Bloomberg: “Exxon isn’t an arm of the U.S. government. It reports to shareholders, so it looks for deals it thinks will turn a profit, and it’s not in the business necessarily of promoting U.S. foreign policy interests.”
Since Russia’s annexation of Ukraine’s Crimea in March, the United States and European Union have responded by authorizing sanctions against Moscow.
Exxon’s Russia chief Glenn Waller recently spoke with Russian president Vladimir Putin about the two entities’ commercial dealings. Putin said, “Nowadays, commercial success is defined by an efficient international cooperation. Businesses, including the largest domestic and foreign companies, understand this perfectly,” he added. Exxon’s Russia chief replied, “We see very strong prospects here, and are ready — with your permission — to work further.”