Exxon's Tillerson and Putin Bros

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As in any good bromance, they hang out in each others’ neighborhoods. To balance out the geographic breadth of the partnership, Rosneft has joined with Exxon to invest in 20 deepwater exploration blocks in the Gulf of Mexico, as well as onshore projects in Texas and Alberta, Canada. Exxon has also given Rosneft the option to acquire a 25% stake in the Port Thomson Unit, which is estimated to hold a quarter of the natural gas and condensate reserves on Alaska’s North Slope

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Just as Putin is unlikely to give back Crimea, you can forget about a company as growth-hungry as Exxon willingly backing away from its Kremlin connections out of some perceived patriotic American duty. As Tillerson’s predecessor Lee Raymond famously said (quoted in Steve Coll’s book Private Empire: ExxonMobil and American Power): “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

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If the Obama administration were to place sanctions on Exxon preventing it from pursuing its Rosneft joint venture, it would be a significant blow to Putin’s long term ambitions of just maintaining, let alone growing, Russia’s oil and gas output. But it would also deal a significant blow to Exxon, which is counting on Russian volumes to help it maintain its own production levels in the decades to come.

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