Government ate your returns

1 March 2018 By Lauren Silva Laughlin Follow @TheRealLSL

The $320 bln oil giant is ending its Rosneft partnership, blaming U.S. sanctions. CEO Darren Woods hopes investing $50 bln stateside will charm investors. But they’re concerned about returns and climate change. Exxon’s 10 pct stock drop this year suggests Woods is striking out.

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On Feb. 28 the world’s largest independent publicly traded oil company said in a regulatory filing that it will exit some joint ventures it currently has with Russia’s Rosneft, citing Western sanctions. The two companies first detailed their partnership in 2012, when current Secretary of State Rex Tillerson was at the helm of Exxon. The ventures included plans to invest as much as $500 billion over the next few decades to develop Russia’s Arctic and Black Sea oil reserves. Rosneft also stood to get a 30 percent stake in Exxon-led projects to develop hard-to-recover reserves in West Texas, Alberta in Canada and the U.S. Gulf of Mexico, according to a Reuters report at the time.

The sanctions, placed on Russia following the country’s invasion of Crimea in 2014, were effective in slowing work on a major discovery in the Kara Sea above the Arctic Circle, according to Reuters.

On Feb. 27 Exxon said it would sell its 19 percent stake in the Terra Nova oil project off the eastern coast of Canada.

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Government ate your returns

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