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2017-07-05 12:20:00

AGAINST RUSSIA SANCTIONS

AGAINST RUSSIA SANCTIONS

WSJ - Exxon Mobil Corp. and other energy companies have joined President Donald Trump in expressing concerns over a bill to toughen sanctions on Russia, arguing that it could shut down oil and gas projects around the world that involve Russian partners.

The pushback from energy companies such as Exxon and Chevron Corp. -- and other industries -- threatens to complicate House passage of the legislation, aimed partly at punishing Russia for what U.S. officials describe as interference in last year's U.S. election. The bill breezed through the Senate last month on a bipartisan, 98-2 vote.

Exxon's advocacy also presents a potential political problem for the Trump administration, which has been trying to avoid conflict-of-interest questions involving Secretary of State Rex Tillerson, the oil giant's former chief executive.

Mr. Tillerson, who has promised to recuse himself from matters involving Exxon, hasn't explicitly spoken out against the sanctions bill, but last month urged Congress not to take any actions that tie the administration's hands.

Mr. Trump is set to meet Russian President Vladimir Putin face-to-face this week for the first time since the election at the G-20 summit of world leaders in Hamburg, Germany. The White House hasn't ruled out a presidential veto of the sanctions measure, which includes a provision that would make it more difficult for the president to relax existing sanctions against the Kremlin, saying that it could erode Mr. Trump's ability to conduct diplomacy.

A U.S. special prosecutor and Congress are investigating Russia's use of cyberattacks in the election and whether there were improper ties between aides to Mr. Trump and Russia's government. The president has denied any wrongdoing.

As the nation's top diplomat, Mr. Tillerson has said Russia must be held accountable. A spokeswoman for Mr. Tillerson didn't immediately respond to a request for comment on Monday.

Lobbyists for Exxon and other oil industry players have expressed dismay to lawmakers about several provisions in the legislation, including measures to prohibit partnerships with Russian individuals or companies under sanctions around the world, and to add congressional review of certain sanctions exemptions. Companies also have expressed concern that the bill could force them to disclose information they consider proprietary.

Exxon spokesman Alan Jeffers said the company doesn't have a position on sanctions but has provided legislators with information about how the bill could "disadvantage U.S. companies compared to our non-U.S. counterparts." A Chevron spokesman declined to comment.

The lobbying by Exxon and other big oil companies is part of a push to preserve potential business relationships with Russia, even as U.S. ties with the Kremlin sink to new lows.

The bill has the potential to scuttle any U.S. business partnership around the world that involves Russian partners. That has prompted concerns not only from energy firms but also banking and industrial companies, according to people familiar with the matter. General Electric Co. is closely watching the legislation over concerns it could disadvantage U.S. companies relative to global peers, one person said.

"This has far-reaching impacts to a variety of companies and industries, " said Jack Gerard, chief executive of the American Petroleum Institute. "It has the potential to penalize U.S. interests and advantage Russia."

The bill faces an uncertain fate in the House, after objections raised by some House Republicans, including Rep. Pete Sessions of Texas. A standoff was avoidable, some analysts say.

Leon Panetta, who served as White House chief of staff under former President Bill Clinton and as a cabinet member in the Obama administration, said that Congress and the Trump administration should try to forge a consensus on what sanctions should be applied.

"When it comes to sanctions policy the best course for this country is to have both the Congress and the president in the same place," Mr. Panetta said. "If it looks like there's a dispute between the president and Congress it sends a terrible message to our adversaries and our allies."

For Exxon, the stakes are especially high: The legislation could further dismantle its fragile partnership with Russian oil giant PAO Rosneft, which has been mostly on hold since the U.S. imposed sanctions on the country in 2014 after Russia's annexation of Crimea. The oil company previously sought a waiver from sanctions, a request the Trump administration rejected in April.

Exxon has moved ahead with an expansion of a project with Rosneft that preceded the current sanctions near Russia's Sakhalin Island in the country's Far East. It has produced more than 650 million barrels of oil since 2005 and is one of the largest foreign investments in Russia.

As written, the bill could affect two existing Exxon projects outside of Russia in which Rosneft holds a stake, according to people familiar with the matter. One is a development involving the use of hydraulic fracturing in the Permian basin in New Mexico, and the other is a prospect in Canada's Alberta province.

The prohibition on Russia partnerships would strike at the heart of efforts by Rosneft to expand outside of Russia. British oil giant BP PLC owns 20% of Rosneft, and the Russian company signed a deal in March with Italian energy company Eni SpA to cooperate globally. Rosneft owns a stake in a massive Eni gas field off Egypt's shores.

Some U.S. House members have echoed Exxon and industry concerns that the legislation could lead to the release of proprietary information. Mr. Sessions, who represents the Dallas area, said he wants to change provisions that could put U.S. firms at a competitive disadvantage.

Mr. Sessions said he is "representing companies in the energy industry that don't want to be blocked from these deals."

-----

Earlier: 

RUSSIA - QATAR COMPETITION 

ЭНЕРГЕТИЧЕСКИЕ РЕКОРДЫ РОССИИ 

САНКЦИИ: РОССИЯ В ДВИЖЕНИИ 

RUSSIAN CHOICE 

EU WITH RUSSIA SANCTIONS 

QATAR'S INVESTMENT TO RUSSIA 

RUSSIA SANCTIONS FOREVERMORE

 

 

 

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