ExxonMobil Applies For Sanctions Waiver To Work With Russian Company
DAVID GREENE, HOST:
This might seem like an awkward time for an American corporation to try to expand business in Russia. But that is what ExxonMobil, Secretary of State Rex Tillerson's old company, is reportedly doing. According to The Wall Street Journal, ExxonMobil has applied for a waiver from U.S. sanctions so it can work with a Russian company to drill for oil in the Black Sea. Reporter Jay Solomon broke this story. He's in our studio this morning.
Jay, good morning.
JAY SOLOMON: Good morning.
GREENE: So these are sanctions the U.S. imposed after Russia seized Crimea from Ukraine in 2014. Should not - these sanctions should not allow this work to be done. So what kind of case is ExxonMobil making here?
SOLOMON: Exxon is basically saying, we have this big asset in the Black Sea. The exploration contract could end by the end of this year if we don't start drilling now, and this is one of the big energy finds in the world. If we - Exxon aren't allowed to develop it, our competitors, whether from France or Italy or Norway, are going to move in. So it's basically a push that we - we have this asset. If we don't develop it now, others will. And if we don't get it, it's going to lose American jobs and American money. So that's - they're making a purely business play on why they need to get this waiver.
GREENE: Well - and the Tillerson connection here cannot be ignored. He was CEO of ExxonMobil, meeting with Vladimir Putin, on record as opposing some sanctions and actually involved in negotiating the beginning of this deal, right?
SOLOMON: You know, he basically negotiated this deal that was concluded in 2012. He - there are pictures of him shaking hands with Vladimir Putin, one of Putin's big money men, a guy named Igor Sechin. And Tillerson received an award from Putin, in part for developing this this contract and this deal. So he is directly tied to the future of this project. And he said he's going to recuse himself for the next few years so he doesn't have any influence on this process where they decide whether there is a waiver or not. But obviously...
GREENE: Oh, I see. So this is a State Department decision. I - this is a Treasury Department decision. State Department has a role, but Tillerson says he's not going to get involved.
SOLOMON: Correct. It's kind of an interagency process that would ultimately make the decision.
GREENE: I mean, the timing here - Senator John McCain, Republican of Arizona - he retweeted your story with the headline "Exxon Seeks U.S. Waiver To Resume Russia Oil Venture." And he said, are they crazy?
I mean, the timing is pretty interesting with these investigations into Russia, with the U.S. pressuring Russia on Syria. Do they have a shot at actually getting this waiver?
SOLOMON: It's hard to say. I mean, the optics are terrible. Like I was saying, I think Exxon, politically, must have known on some level this is not a great time to do this. But they're also saying, if they don't get this process going, if they don't at least start more exploration in this area and start drilling wells, they could lose it. So I think for business, financial reasons, they thought they had to go ahead. Politically, in an environment where you have the investigation into the cyberhacking, alleged collusion between the Trump administration and the Russians, it's politically very bad optically. So I think it's going to be hard for them to get that waiver.
GREENE: And just briefly - I mean, this is not something that is public. A company's request for a waiver does not have to be made public. I mean, I don't want you to reveal too much of your reporting. But did you learn about this from the Treasury Department or where.
SOLOMON: No, it's just - there are some elements inside the administration that are a bit disaffected, I'd say - are not loving some of the things that are going on. And the Trump kind of ties to Russia is one of the more contentious issues. And it is - it's a decision that will be ultimately made by the Office of Foreign Assets Control. It's a kind of a unit of the Treasury Department that does make sanctions decisions.
GREENE: OK. Interesting stuff. That is Wall Street Journal reporter Jay Solomon. Thanks for joining us.
SOLOMON: Thank you.
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