Exxon Mobil Corp. and Chevron Corp have expressed concerns over a bill to toughen sanctions on Russia, arguing that it could shut down oil and gas projects around the world that involve Russian partners, The Wall Street Journal writes.
The pushback from energy companies such as Exxon and Chevron Corp. - and other industries - threatens to complicate House passage of the legislation, aimed partly at punishing Russia for what U.S. officials describe as interference in last year's U.S. election.
Exxon's advocacy also presents a potential political problem for the Trump administration, which has been trying to avoid conflict-of-interest questions involving Secretary of State Rex Tillerson, the oil giant's former chief executive.
Lobbyists for Exxon and other oil industry players have expressed dismay to lawmakers about several provisions in the legislation, including measures to prohibit partnerships with Russian individuals or companies under sanctions around the world, and to add congressional review of certain sanctions exemptions. Companies also have expressed concern that the bill could force them to disclose information they consider proprietary.
Exxon spokesman Alan Jeffers said the company doesn't have a position on sanctions but has provided legislators with information about how the bill could "disadvantage U.S. companies compared to our non-U.S. counterparts."
The bill has the potential to scuttle any U.S. business partnership around the world that involves Russian partners. That has prompted concerns not only from energy firms but also banking and industrial companies, according to people familiar with the matter. General Electric Co. is closely watching the legislation over concerns it could disadvantage U.S. companies relative to global peers, one person said.
"This has far-reaching impacts to a variety of companies and industries, " the chief executive of the American Petroleum Institute Jack Gerard said. "It has the potential to penalize U.S. interests and advantage Russia."
The bill faces an uncertain fate in the House, after objections raised by some House Republicans, including Rep. Pete Sessions of Texas. A standoff was avoidable, some analysts say.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to a correspondent of Vestnik Kavkaza, said that there are not so many American projects in Russia, and all of them have already been frozen.
"Nevertheless, any new sanctions will prevent them from entering new Russian projects. And it can be said that these new sanctions are directed mainly against the gas industry and against gas pipeline projects in which neither ExxonMobil nor Chevron are involved. But they understand that every new wave of sanctions makes it more problematic to cancel the original sanctions. So they are actively acting against it," the analyst explained.
The expert also noted that in fact those arguments used by American corporations are purely arguments within the framework of American political culture and rhetoric. "They are trying to use the fact that senators always say that America should be a leader. Because the new sanctions are imposed against all companies. It says that in general all companies in the world are forbidden to cooperate with Russia in the framework of gas pipeline projects. And the first wave of sanctions said that American companies are forbidden to finance Russian projects," he explained.
As for the question, whether the new anti-Russian sanctions imposed by the United States will hit the oil and gas giants and the industry as a whole in both countries, the expert is confident that it will not affect the US corporations. "The US gas companies will only benefit from it, because the task of these sanctions is to force Russia out of the European gas market. I have no doubt that these sanctions will be followed by new sanctions, which will limit gas supplies. I think that this 'sanctions action' is to prohibit the supply of Russian gas to Europe step by step. The sanctions will not affect the oil industry. The sanctions do not mention oil at all," Igor Yushkov said.
An associate professor of the Graduate School of Corporate Management of RANEPA, senior fellow at IE RAS Ivan Kapitonov, in turn, recalled in the first place that virtually all joint Russian-US projects in the oil sector were closed after the first wave of sanctions against Russia.
According to the expert, at the same time, Chinese and Indian companies began to feel more comfortable in the Russian market. "In this regard, it is worth looking at the experience of cooperation on the Vankor site, which Rosneft shared with the Indian side. In this case the Americans are losing ground," the senior fellow at IE RAS said.
In addition, he drew attention to the fact that the new US sanctions against Russia would only temporarily strike the Russian industry. "The experience of the sanctions confrontation showed that we can cooperate with other foreign companies quite effectively. Russia is rich in resources and in general it has shown that it is ready to cooperate on fair partnership terms with other companies as well. I mean China, India, and a number of other countries, including Iran," Ivan Kapitonov summed up.
