| Exxon CEO to Visit Moscow: Is Big Oil Trying to Patch Up? - Analyst Blog | |
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The CEO of Exxon Mobil Corp. XOM, Rex Tillerson, is slated to visit Moscow on Wednesday. The U.S. State Department is giving no sign of lifting sanctions against Russia.
Tillerson plans to hold meetings with Russian oil producer Rosneft and government officials. But the visit is brewing up a storm owing to its timing. The intended visit to Moscow has put the spotlight on inept Western efforts to punish the Russian economy for interfering in Ukraine.
Sanction Recap
The imbroglio started in Mar 2014, when the U.S. alongside the European Union and international organizations, implemented a series of sanctions against individuals and businesses from Russia and Ukraine, in response to the annexation of Crimea, a peninsula in southern Ukraine. Russia retaliated by imposing sanctions of its own, including a ban on food imports from the EU, U.S., Norway, Canada and Australia. With Russian ambitions extending to southern and eastern Ukraine, so did the list of sanctions.
In Dec 2014, the White House signed a bill allowing the levy of further sanctions against Russia, although no action has yet been taken to introduce these. The new sanctions were targeted at Russia's state-owned energy and defense industries.
Can Big Oil Remain a Reliable Partner?
With the political imbroglio ongoing, concerns are being raised by investors regarding the fate of oil majors like Exxon Mobil, BP p.l.c. BP, Royal Dutch Shell plc RDS.A, TOTAL S.A. TOT and Statoil ASA STO.
The stakes are high for Exxon Mobil since the company raised its Russian holdings to 63.7 million acres in 2014 from 11.4 million at the end of 2013. Per Bloomberg, Exxon’s Russian holdings now eclipse the 14.6 million acres of rights it holds in the U.S. Next in our list would be British energy giant BP, which owns almost one-fifth stake in Rosneft and accounts for a tenth of its total market cap.
Similarly, with a stake in the Sakhalin gas-export project, Anglo-Dutch energy major Royal Dutch Shell also has a high risk in the Russian roulette. European oil majors like TOTAL and Statoil are also on the hook. Russian wells contribute about 10% of Total’s output.
Did the Ban Boomerang?
While the West found Russia’s annexation unpardonable, we wonder whether the political sanctions backfired. After all, the most damaging outcome of these bans was the embargo on drilling Russia’s lucrative Arctic waters and shale deposits which western explorers themselves have long had their eye on. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EXXON MOBIL CRP (XOM): Free Stock Analysis Report BP PLC (BP): Free Stock Analysis Report TOTAL FINA SA (TOT): Free Stock Analysis Report ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report STATOIL ASA-ADR (STO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Exxon Mobil is a and oil producing company based in United states of america. Exxon Mobil is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is US$ 499.8 billions as of today (€ 467.1 billions). Its stock quote reached its lowest recent point on March 14, 1997 at US$ 100.12, and its highest recent level on April 26, 2024 at US$ 117.96. Exxon Mobil has 4 237 270 016 shares outstanding. |