U.S. Firm Exon Mobil Ignores Sanctions on Russia; Starts Oil Work at Arctic

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By Kalyan Kumar | August 13, 2014 4:38 PM EST

At a time, Russia has been hit with hard economic sanctions, and an angry Russia banning food imports from the Western rivals, it will be unthinkable for a U.S. company to operate in Russia.

Reuters
Russia's President Vladimir Putin (R), Brazil's President Dilma Rousseff (L) and FIFA President Sepp Blatter take part in the official hand over ceremony for the 2018 World Cup scheduled to take place in Russia, in Rio de Janeiro July 13, 2014.

But American oil giant ExxonMobil has defied all such perceptions and prejudices. The U.S. company on Saturday started drilling oil at Russia's Arctic area in partnership with the Russian company Rosneft.

The Conservative Read reported that Exxon brought a rig from Norway to drill first well of Russia in the Kara Sea. It looked as if the U.S. sanctions are not binding joint projects of Russian and U.S. companies. The sanctions can starve Rosneft of dollar financing with curbs on modern technology. Rosneft is run by Putin's close ally, Igor Sechin, who is now facing U.S. sanctions.

Putin Hails U.S. Company

Russian President Vladimir Putin hailed this as a model act of "cooperation." Speaking on a videoconference from his Black Sea residence in Sochi, the Russian president congratulated Rosneft CEO Igor Sechin and Glenn Waller, ExxonMobil's lead manager in Russia. Putin hoped that the commercial success of the project would widen efficient international cooperation.  

The Russian president noted that all businesses, including Russian and foreign companies, need to rise above political difficulties and allow pragmatism and common sense to prevail.

Model Cooperation

Mr Putin said he welcomed this business-like approach from the U.S. company and assured the best cooperation from Russia. The joint venture will benefit the respective national economies and contribute positively to global energy situation, Mr Putin noted.

Waller assured Russia that Exon Mobil is keen to work with Russia and the cooperation will be a long-term one.

Arctic Challenge

According to Forbes magazine, Arctic exploration is one of the hardest in the world and Russian technology is not updated for its exploration or production. So the joint venture with Rosneft is a testament of U.S.-Russia relations based on pragmatism.

Also, ExxonMobil wields a lot of clout in Washington as an important voice on oil and gas matters.  The U.S. and Europe are unlikely to play hardball with Russian energy sector.  Russia will find ExxonMobil useful because it wants to learn new technologies.

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(Photo: Reuters / Alexey Nikolsky)
Russia's President Vladimir Putin (R), Brazil's President Dilma Rousseff (L) and FIFA President Sepp Blatter take part in the official hand over ceremony for the 2018 World Cup scheduled to take place in Russia, in Rio de Janeiro July 13, 2014.
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