Opinion

Tillerson to face further Russia scrutiny this week


Note: Article originally written by Paul Harris, Glacier Media, and posted with permission.

Former ExxonMobil CEO Rex Tillerson's track record in Russia will come under further scrutiny this week. Tillerson, who is Donald Trump's nominee for Secretary of State, will begin confirmation hearings with the Senate Foreign Relations committee on January 11.

The nomination of Tillerson has drawn fire from critics due to his record of deal making within Russia on behalf of ExxonMobil and his subsequent relationship with Vladimir Putin. Tillerson retired as ExxonMobil's chairman and CEO at the end of 2016. He has been replaced by Darren W. Woods, formerly the company's president.

Trump's actions since Tillerson's nomination have done little to quell the view that his presidency will actively re-set Russian relations and the direction of U.S. diplomacy generally. Over the last week, the President-elect and his team have been facing questions regarding Russia cyber-espionage and other efforts to influence the US election. The President elect's response on Twitter continues to point towards re-set with Russia. 



Specific to Tillerson, critics have questioned the oilman's views on economic sanctions and his connections within Russia as evidence that U.S.-Russia relations are about to thaw considerably.

For Oil and Gas producers, energy services companies and investors, a strategic shift in US-Russian relations could present significant investment and growth opportunity. Russia continues to be one of the largest producers of oil and gas and is geographically situated between both Europe and key Asian markets. Russia has vast untapped reservoirs that could be accessed with unconventional technology. Thawing of U.S.-Russia relations may lead to U.S.-based companies being granted greater access and opportunities.

Western oil and gas companies have largely been blocked from activity in Russia due to economic sanctions. Over the last 3 years, Russian's energy industry has undergone significant shifts.    

Evaluate Energy recently extracted Russian M&A deals that have occurred over the last few years. Since the start of 2014, the year in which the Crimean sanctions were introduced against Russia, the following major deals, mainly involving Rosneft, have taken place for Russian E&P assets involving foreign investors:



Source: Evaluate Energy M&A Database

Evaluate Energy has an extensive database that has tracked oil and gas industry activity in Russia since 2006. The Evaluate Energy database tracks the domestic and global companies that operate in Russia, comprehensive energy industry news, oil and gas assets, deal activity and more. This may be an essential tool to understand the state of energy industry in Russia and where to find opportunity.

About author: Paul Harris is Director, European B2B Markets, for Glacier Media. He is based in London, UK.



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