Treasury won’t grant Exxon drilling waiver for Russia

Treasury won’t grant Exxon drilling waiver for Russia
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The Treasury Department will not grant Exxon Mobil Corp.’s request for a waiver allowing it to work with Russia’s state oil company on a joint drilling venture, the agency said Friday.

“In consultation with President Donald J. Trump, the Treasury Department will not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions,” Treasury Secretary Steven Mnuchin said in a statement. 

Exxon reportedly requested a waiver from the Trump administration this week that would allow it to drill for oil in the Black Sea, an area covered by U.S. sanctions imposed on Russia following the country's annexation of Crimea in Ukraine. 

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Exxon has long hoped to partner with Russian’s state-run oil giant PAO Rosneft on a drilling plan there. The company attempted to gain a waiver from sanctions allowing the operation in 2015, but that request was denied by Obama officials.

In a statement, Exxon said it "understand[s] the statement today by Secretary Mnuchin in consultation with President Trump."

"Our 2015 application for a license under the provisions outlined in the U.S. sanctions was made to enable our company to meet its contractual obligations under a joint venture agreement in Russia, where competitor companies are authorized to undertake such work under European sanctions," the statement continued.

Secretary of State Rex Tillerson was Exxon’s CEO in 2012 when the two companies hatched the drilling plan, which would be worth billions of dollars for both companies, as well as Russia. 

The State Department is one of a handful of federal agencies tasked with approving sanctions waivers, though Tillerson has said he will sit out decisions involving his former company for at least two years. 

Exxon under Tillerson opposed Obama administration sanctions on Russia, arguing they were not properly issued. After the sanctions were put in place, the company did obtain a waiver to finish drilling a well in the Arctic Ocean.

Exxon's waiver request was met with resistance from key lawmakers this week. Sen. John McCainJohn McCainPoliticians absent from Thompson Reuters brunch McCain downplays threat of pre-emptive strike against North Korea McCain plan gains momentum amid North Korea threats MORE (R-Ariz.), a leading Russia hawk, responded to news of Exxon's request with a Wednesday tweet reading, "Are you crazy?" Other lawmakers, including Sens. Marco RubioMarco RubioLongtime GOP incumbent will not seek reelection Overnight Defense: Commander calls North Korea crisis 'worst' he's seen | Trump signs VA order | Dems push Trump to fill national security posts What’s with Trump’s spelling mistakes? MORE (R-Fla.) and Bob MenendezRobert MenendezTaiwan deserves to participate in United Nations The way forward on the Iran nuclear deal under President Trump Corruption trial could roil NJ Senate race MORE (D-N.J.), criticized the request as well. 

- Updated at 3:16 p.m.