Exxon sides with Russia?

Fuel Fix:
Exxon Mobil Corp. extended its partnership with Russia’s state-controlled oil company even as U.S. and European nations threaten additional sanctions to punish Vladimir Putin’s regime for its actions in Ukraine.

Exxon signed the agreement with OAO Rosneft Chief Executive Officer Igor Sechin at a forum in St. Petersburg today, extending a pact that involves drilling for crude in the Arctic and Siberia and liquefying natural gas for export in Russia’s Far East, according to a statement on Moscow-based Rosneft’s website. Exxon didn’t immediately return a phone message seeking comment.

Exxon is among American oil producers that rebuffed U.S. State Department pressure to skip the International Economic Forum this week in Putin’s hometown. With at least $30 billion already invested in Russia’s oil and gas sector, U.S. and European explorers are betting the Ukraine crisis won’t derail their aspirations to capture some of Russia’s 75 billion barrels of reserves.

France: Total signs shale deal with Russia’s Lukoil despite sanctions

Among U.S. companies, Irving, Texas-based Exxon is the biggest player in Russia, where it has a series of joint ventures with Rosneft. It already produces oil in Russia’s Far East with Rosneft and the two companies plan to start drilling an exploration well in the Kara Sea this year. Together they hold licenses to explore huge swathes of the Arctic Ocean.

While sanctions against Russia have targeted individuals — including Sechin — and avoided industrywide measures, the U.S. has threatened stronger action if Putin’s government obstructs the Ukraine presidential election scheduled for May 25. Producers still plan to invest more in Russia, pursuing exploration in the Arctic Ocean and drilling shale oil fields in Siberia.

“Foreign companies are expected to invest billions of dollars in Russian projects,” said Timur Salikhov, an oil and gas analyst at BCS Financial Group. “I don’t think many of them will do so until there is resolution to the ongoing standoff with Ukraine.”
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I find this disappointing.  I would rather see them make this kind of investment in the US and I suspect they would if the administration and the anti energy left were not blocking access to so much of the federally controlled sites.  It is still a risky proposition because Russia seems intent on its collision course with the West which would mean that sanctions could eventually cause the company to lose its investments in Russian projects.

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