US Treasury will not waive Russia sanctions for oil companies

The Treasury Department said it will not issue waivers to US companies to authorize drilling prohibited by current Russian sanctions

The US Treasury on Friday said it would not waive trade sanctions for US companies seeking to resume oil drilling in Russia, including ExxonMobil.

The announcement followed media reports that Exxon had sought a waiver to resume a joint venture with Russia's Rosneft oil company.

"In consultation with President Donald J Trump, the Treasury Department will not be issuing waivers to US companies, including Exxon, authorizing drilling prohibited by current Russian sanctions," the Treasury Department said in a statement.

Having failed to win a waiver from the Obama administration in 2015, ExxonMobil began pressing the Treasury to grant an exemption in March, shortly after the company's former CEO Rex Tillerson became secretary of state, The Wall Street Journal reported Wednesday.

Tillerson, who while with ExxonMobil had forged close relations with Russian President Vladimir Putin and with Rosneft, had recused himself from the decision.

ExxonMobil has sought permission to drill in several areas that are currently off limits, including the Black Sea.

The Trump administration has extensive ties to the energy sector and has vowed to promote oil exploration and production, slash regulations and allow for more development.

In a statement, ExxonMobil said it understood the Trump administration's decision but underscored its position that it was hamstrung by the restrictions.

"Our 2015 application for a license under the provisions outlined in the US sanctions was made to enable our company to meet its contractual obligations under a joint venture agreement in Russia, where competitor companies are authorized to undertake such work under European sanctions," the statement said.

The decision comes as relations between Moscow and Washington have soured in recent weeks following a US missile strike in Syria in retaliation for a suspected chemical attack on civilians.

Trump also remains in the glare of congressional and federal investigations into alleged Russian efforts to tip November's presidential elections in his favor.

Trump eventually acknowledged the existence of election-related Russian cyber-attacks but denied that they had affected the outcome.