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 Sidney McCainMcCain rips Trump for attacks on press NSA spying program overcomes key Senate hurdle Meghan McCain says her father regrets opposition to MLK Day 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 Antonio RubioOvernight Cybersecurity: Bipartisan bill aims to deter election interference | Russian hackers target Senate | House Intel panel subpoenas Bannon | DHS giving 'active defense' cyber tools to private sector Senators unveil bipartisan push to deter future election interference Puerto Rico's children need recovery funds MORE (R-Fla.) and Bob MenendezRobert (Bob) MenendezCongress must provide flexible funding for owners of repeatedly flooded properties Senate ethics panel resumes Menendez probe after judge declares mistrial Judge declares mistrial in Menendez bribery case MORE (D-N.J.), criticized the request as well. 

- Updated at 3:16 p.m.