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Comment: Will energy help bridge the divide between Russia and America?

by Guest on Jun 11, 2017


About the author: Igor Yusufov is a former Russian energy minister, Vladimir Putin's special representative on international energy dialogue and, in 2011, founded a $3bn energy investment fund.
About the author: Igor Yusufov is a former Russian energy minister, Vladimir Putin's special representative on international energy dialogue and, in 2011, founded a $3bn energy investment fund.

From the point of view of the global energy industry, the visit of the American Secretary of State, Rex Tillerson, to Moscow could be seen as his separation from the global energy agenda – his life cause.

After all, at the heart of discussions between the world’s biggest oil and gas corporation CEO; Russian president, Vladimir Putin; and his colleague, Sergey Lavrov, were ideas for normalising bilateral relations, which have been brought down to possibly the lowest-ever level.

In fact, however, we know that President Trump declared economic pragmatism and the observance of American interests as the priority of his policy. Having proclaimed the normalisation of economic ties the first Russian-American priority in the short-term, the US and Russian presidents apparently set a truly pragmatic trend for future interactions between the two energy superpowers during their first telephone conversation in January of this year.

Looking at the visit within the global energy market context, Exxon has been working in Russia for more than 20 years and is the key partner of Russian giant, Rosneft. Being in possession of correspondingly 20% and 30% of the Sakhalin-1 project, Rosneft and Exxon initiated a close cooperation on the POBEDA (Victory) deposit in the Kara Sea, containing 130 million tonnes of oil and almost 500 billion cubic metres of gas.

On the eve of the historic Tillerson visit to Moscow, the new ExxonMobil CEO, Darren Woods, had high-level meetings in the Russian capital, which seem to have covered the energy constituent of the bilateral relations.  Woods, as successor to Tillerson, had multiple issues to discuss in Moscow, related to the future of the energy sector of both countries. The meeting with President Putin is the indicator of the significance of those issues.

So, a softening or lifting of sanctions that clearly contradict the interests of both companies and nations, is in the common interest. If President Trump declares pragmatism the main principle of his policies, simple steps to overwhelm the heritage of past times would be logical and understandable.

Being CEO of a huge commercial company, Woods could have first of all discussed economic aspects of the present and future cooperation with Russian companies. I am sure that both Exxon and Rosneft are interested in the continuation of this cooperation, architected with the active participation of the present Secretary of State. Politically motivated sanction regimes represent a real hindrance for this development, however.

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