Exxon Doing Russia Business as Usual Amid U.S.-Led Sanctions

May 28, 2014 2:54 pm ET

(Updates with comments from CEO in fifth paragraph)

May 28 (Bloomberg) -- Exxon Mobil Corp., which this month extended its partnership with Russia’s OAO Rosneft, hasn’t had to change its business in the country amid Ukraine-related sanctions and said such steps are typically ineffective.

“We don’t find them to be effective unless they are very well implemented,” Chief Executive Officer Rex Tillerson said today during a shareholders meeting in Dallas. Authorities imposing the sanctions should consider “who are they really harming?”

Exxon is among American oil producers that ignored U.S. State Department recommendations to skip an energy forum in St. Petersburg last week as it extended a pact with Rosneft involving drilling for crude in the Arctic and Siberia. Exxon, through a 2011 deal with the state-run crude producer, owns drilling rights across 11.4 million acres of Russian land, including vast swaths of the Kara Sea.

U.S. and European nations have imposed sanctions to punish Vladimir Putin’s regime for its actions in Ukraine. Among those targeted was Rosneft Chief Executive Officer Igor Sechin. Measures from President Barack Obama’s administration included asset freezes and bans on travel to the U.S.

Travel Ban

The travel ban on Sechin has so far not affected collaboration with Exxon, which is currently working with Rosneft to drill an exploratory well in the Arctic this year, Tillerson said. The companies’ partnership gives Rosneft the ability to buy stakes in Exxon’s North American projects in exchange for Exxon’s access to the Russian Arctic.

“We have plenty of meetings with them in Russia,” Tillerson said. “It’s not impacted our ability to carry on the other business activities.”

The Irving, Texas-based producer is the biggest U.S. player in Russia, where it has a series of joint ventures with Rosneft.

--With assistance from Joe Carroll in Chicago.