The Russian Finance Ministry has announced that it has reached an agreement with ExxonMobil over a $600m tax dispute from 2015. At the time, Rex Tillerson was still CEO before leaving to join the Trump administration as US Secretary of State.
The dispute stems from ExxonMobil’s participation in the Sakhalin-I project, which has set various industry records in terms of depth, directional drilling, and rate of penetration. Extended reach drilling enabled the Z-44 Chayvo well to reach a total depth of over 12km, making it the longest well in the world.
While the details have not been published, the Russian Finance Ministry said:
“An amicable agreement was signed on September 12 between Russia and ExxonMobil. The parties have reached a mutually beneficial compromise.”
Kommersant, a prominent business broadsheet in Russia, does cite sources close to the deal, however. According to it, ExxonMobil withdrew its demands in return for being included in a substantial oil exploration project.
ExxonMobil’s engagement with Russia is currently constrained by US sanctions against the country, with it being fined $2m by the US Treasury in June for non-compliance in 2014, when Rex Tillerson was still at the helm. Among other things, the sanctions prohibit technology transfers to Russian energy projects, meaning that ExxonMobil has been unable to continue joint exploration of the Arctic Kara Sea with Rosneft.
While ExxonMobil has major upstream presences around the world, it is also a prominent lubricant producer through its Mobil brand, with its industrial lubricants being available through Mobil distributors.