Russia courting Exxon with new projects while US sanctions loom

The Russian government and Exxon Mobil have begun discussions over new oil and gas projects according to reports on Friday, potentially complicating future US sanctions against the Kremlin.

Russian government officials said the talks could result in growth of the relationship between US oil giant Exxon and Russian state-run outfit Rosneft, with Exxon having been offered a range of options including in natural gas, refining or chemicals, none of which are currently directly subject to US sanctions.

However, certain “sensitive” goods and technologies that could affect liquefied natural gas, refining or chemicals projects were banned from being exported to Russia in August.

The majority of the two companies’ joint ventures, including a 2013 agreement to drill millions of acres on and offshore in Russia’s Arctic and the Black Sea, were abandoned by Exxon earlier this year after Washington imposed sanctions on Russia for alleged election tampering and cyber-attacks.

Exxon has reported that it incurred a loss of $200bn from abandoning its arctic projects.

Consequently, the New York-listed company has just one project remaining in the country, its Sakhalin-1 venture that started more than 10 years ago and pumps more than 200,000 barrels of crude a day, but a Russian official said if Exxon picks one of the offered deals then a new agreement could be in place before the end of 2018.

The news came after US special representative for Ukraine Kurt Volker said the Trump administration would impose sanctions on Russia "every month or two" over its alleged election meddling in the 2016 US presidential elections, the Salisbury poisoning and its alleged involvement in the Ukrainian conflict.

Exxon Mobil’s shares were up 0.67% at $82.04 at 1506 BST.