US Will Not Issue Drilling Waivers to Russia Sanctions

The U.S. government says it will not waive trade sanctions for U.S. companies seeking to drill for oil in Russia, including for U.S. oil giant ExxonMobil.

Treasury Secretary Steven Mnuchin made the announcement Friday, indicating that the United States would maintain a tough stance on sanctions against Russia.

“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,” he said in a brief statement.

Exxon has sought permission to drill in several areas that are currently off limits because of the Russian sanctions, including in the Black Sea. It sought to resume a joint venture with Rosneft, a Russian state-owned oil company.

Exxon’s former CEO Rex Tillerson, who is now secretary of state in Trump’s Cabinet, has recused himself from the administration’s decision.

Tillerson has established close ties with Russian officials, including President Vladimir Putin, and has previously spoken out against the sanctions.

Crimea-related sanctions

The United States and the European Union imposed sanctions on Russia in 2014 in response to Moscow’s annexation of the Crimea region of Ukraine.

The European Union sanctions do not keep European oil companies from operating in Russia, a fact that has frustrated Exxon.

“We understand the statement today by Secretary Mnuchin in consultation with President Trump,” Exxon spokesman Alan Jeffers said in statement. However, he said the company was hamstrung by the U.S. government’s position.

“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,” Jeffers said.

Exxon has said the company previously received several waivers from the sanctions during the Obama administration for limited work with Rosneft.

Friday’s announcement comes as U.S. lawmakers continue to investigate possible ties between some Trump campaign aides and Moscow. It also comes at a time when relations between the United States and Russia have become more strained following a U.S. missile strike in Syria.

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