By Meagan Clark - Exxon Mobil (NYSE:XOM) CEO Rex Tillerson will speak Monday at a summit in Moscow, despite requests from the U.S. government to isolate Russia over its actions in Ukraine, according to the program’s online schedule.
Russia’s state-controlled gas company Gazprom (MCX:GAZP) stopped supply natural gas on credit to Ukraine on Monday, saying it will only supply gas Ukraine pays for, the New York Times reported. Ukraine claims Gazprom is overcharging.
Tillerson’s scheduled speech at the World Petroleum Congress, a major industry event hosted by an independent organization every three years, is a few months before Exxon plans to drill its first well in Russian Arctic waters with state-controlled oil company Rosneft (MCX:ROSN). The U.S. said it won’t send government officials to the meeting and discouraged U.S. senior executives from attending.
Exxon’s chief will stand with Rosneft’s chief, Igor Sechin, who is closely connected to Russian president Vladimir Putin and was sanctioned by the U.S. in April. The sanction prevents Sechin from travelling to the U.S. and bans American citizens from conducting business with him but not his company.
The two companies signed an agreement in May in St. Petersburg at a business forum that solidified the joint project to drill in the Arctic and Siberia and to liquefy natural gas for export to the Far East, while the U.S. and Europe discussed whether to impose harsher sanctions on Russia to condemn its treatment of Ukraine. Many U.S. companies boycotted the forum, following suggestions from the U.S. State Department.
The partnership with Russia’s massive oil producer is one of Texas-based Exxon’s most promising opportunities to find new oil reserves. Initial drilling in August is expected to cost $3.2 billion and could hold billions of barrels of oil, though it would be years before the companies could produce meaningful amounts of crude from the Arctic well.
Aside from the gas war, Ukrainian officials have accused Russia of rolling tanks into their country to support pro-Russian separatists. The U.S. and other countries have backed Ukraine’s claim, but Russia has denied arming the separatists.