Citing Sanctions, Exxon Cancels Joint Ventures with Rosneft

ExxonMobil Corp has announced that it will exit some joint ventures with Rosneft, an integrated oil company majority owned by the Government of Russia.

In a US Securities and Exchange Commission filing dated 28 February, Exxon Mobil wrote, “In 2013 and 2014, the Corporation and Rosneft established various entities to conduct exploration and research activities. In 2014, the European Union and United States imposed sanctions relating to the Russian energy sector. In the latter half of 2017, the United States codified and expanded sanctions against Russia. With respect to the foregoing, the Corporation and its affiliates continue to comply with all applicable laws, rules and regulations. In late 2017, the Corporation decided to withdraw from these joint ventures. The Corporation expects it will formally initiate the withdrawal in 2018. The decision to withdraw resulted in an after-tax loss of $0.2 billion.”

The joint ventures were part of an agreement originally brokered by Rex Tillerson, the former CEO of Exxon Mobil who now serves as US Secretary of State. According to multiple sources, representatives from the Russian company said the pullout will result in serious losses for its U.S. partner.