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Arctic, Arctic Drilling, Arctic oil, Black Sea, Carter Page, Cayman Islands, Chukchi, clean energy, climate change, Crimea, dangers of nuclear, Eni, environment, Exxon, ExxonMobil, fossil fuels, Gazprom, Igor Sechin, India, Italy, Japan, Kara, Laptev, North Korean, Norway, Novaya Zemlya, nuclear, nuclear energy, nuclear industry, Nuclear Submarines, nuclear waste, nuclear weapons, nuclear weapons testing, Obama, oil and gas exploration, Putin, radioactive waste, renewable energy, Rosneft, Russia, Russian sanctions, Sakhalin, Sakhalin 1, Sakhalin 2, Secretary of State, Shell, Steele Dossier, Tillerson, Trump, US Congress
Background: Whereas the income of Exxon has been compared to that of countries (a), the Russian government is an oil-gas (Rosneft-Gazprom) and nuclear corporation (Rosatom). The US, Norway, Japan, the UK and others, paid to help clean-up Russia’s nuclear mess in the Arctic, most likely because of the oil and gas potential. At least $20 billion was pledged to clean up the nuclear mess. This has meant that Russia had that much more money to make more nuclear messes (b).
While the sanctions against Russia appear to have stopped Arctic drilling for now (c), ExxonMobil is still the operator, as well as partial owner, at Sakhalin 1, meaning that it may even be complicit with Russia/Russian companies in sending oil to North Korea. At Sakhalin 2, the operating consortium is controlled by Gazprom, though Shell is also there. Companies from India and Japan are also involved at Sakhalin 1 and 2. Italy’s ENI, around 20% state owned (d), decided to drill (recently) in the Black Sea despiate sanctions. Notice that the Kara Sea exploration license extends to 2020: “ExxonMobil’s net acreage holdings in Sakhalin at year-end 2015 were 85 thousand acres, all offshore. A total of 1.5 net development wells were completed. The Arkutun-Dagi project started up, and development activities continued on the Odoptu Stage 2 project in 2015./ At year-end 2015, ExxonMobil’s net acreage in the Rosneft joint venture agreements for the Kara, Laptev, Chukchi and Black Seas was 63.6 million acres, all offshore. ExxonMobil and Rosneft formed a joint venture to evaluate the development of tight-oil reserves in western Siberia in 2013…. Terms for ExxonMobil’s Sakhalin acreage are fixed by the production sharing agreement (PSA) that became effective in 1996 between the Russian government and the Sakhalin-1 consortium, of which ExxonMobil is the operator. The term of the PSA is 20 years from the Declaration of Commerciality, which would be 2021. The term may be extended thereafter in ten-year increments as specified in the PSA./ Exploration and production activities in the Kara, Laptev, Chukchi and Black Seas are governed by joint venture agreements concluded with Rosneft in 2013 and 2014 that cover certain of Rosneft’s offshore licenses. The Kara Sea licenses covered by the joint venture agreements concluded in 2013 extend through 2040 and include an exploration period through 2020. Additional licenses in the Kara, Laptev and Chukchi Seas covered by the joint venture agreements concluded in 2014 extend through 2043 and include an exploration period through 2023. The Kara, Laptev and Chukchi Sea licenses require development plan submission within eight years of a discovery and development activities within five years of plan approval. The Black Sea exploration license extends through 2017 and a discovery is the basis for obtaining a license for production. Refer to the relevant portion of “Note 7: Equity Company Information” of the Financial Section of this report for additional information on the Corporation’s participation in Rosneft joint venture activities.” Excerpted from the Exxon submission to the US SEC: https://www.sec.gov/Archives/edgar/data/34
By Greenpeace: “What Russian Sanctions Have to Do With Arctic Drilling, In 5 Steps by Ryan Schleeter, February 10, 2017
If you’ve been paying attention to Trump’s policy moves in his first month, you’ve probably heard something about Russian sanctions. That might sound dry, but what if I told you that the real story behind these sanctions is actually super scandalous and important?
Step One: Russia Invaded Ukraine
We’ll start with the reason these sanctions [1] exist in the first place. In early 2014, Russia invaded the Ukrainian territory of Crimea with the intent to annex the region.
The invasion sparked swift international backlash. In March 2014, President Obama imposed sanctions that included prohibiting certain Russian officials from entering the United States and suspending various trade deals.
Then in April — after Russia went ahead with the invasion anyway — the Obama administration banned business transactions with seven Russian officials, including a man named Igor Sechin.
Step Two: This Becomes Even More About Oil
Igor Sechin is the CEO of Rosneft, a state-owned Russian oil company. In 2011 and 2012, he signed agreements with ExxonMobil that gave the latter rights to drill in parts of the Russian Arctic (shown in this map). http://www.greenpeace.org/usa/wp-content/uploads/2017/02/russian-arctic-drilling.jpg
But after the Crimea sanctions, the two were stuck. Exxon couldn’t continue in its partnership with Rosneft without violating U.S. foreign policy and Rosneft didn’t have the capacity to proceed on its own. Exxon CEO Rex Tillerson [2] lobbied extensively against the sanctions, but to no avail.
Exxon and Rosneft remained in this holding pattern for the rest of the Obama administration, with sanctions costing Exxon $1 billion [3] in 2015 as a result.
Step Three: The CEO of Exxon Becomes Our Secretary of State
Whereas Rex Tillerson wasn’t able to convince the Obama administration to change its stance, he did manage to cozy up to Trump. While Trump hasn’t lifted the sanctions just yet, he did make Tillerson his Secretary of State.[4]
That means that Tillerson has significant influence over whether Trump will lift the Crimea sanctions, which he’s expected to do via executive order. If that happens, Exxon and Rosneft can pick up right where they left off, likely bringing massive profits [5] to both companies.
Tillerson claims to have broken his financial ties to Exxon now that he’s Secretary of State and said he would recuse himself from any State Department decisions concerning Exxon for his first year on the job. But since his confirmation by the Senate, we’ve heard nothing on how that will be enforced or even disclosed.
Step Four: Scandal
The Steele dossier [6] — the same unconfirmed document published by Buzzfeed [7] that told the world about Trump’s alleged … sexual fetishes (the less that’s said the better) — also includes some scandalous intel on Rosneft if it’s proven to be true.
According to the dossier, Igor Sechin had a secret meeting with Trump aide Carter Page in July 2016. In the meeting, Sechin pushed for the Crimea sanctions to be lifted so that Rosneft and Exxon could get on with plundering the Arctic for oil. He offered Page and his associates the brokerage of a 19 percent stake in Rosneft in return. Page was non-committal, but did say that if Trump were elected he would lift the sanctions.
Now, the integrity of this dossier has come under fire from all sides, and its contents should be treated with skepticism until more details emerge. But what happened next we absolutely know to be true — a group of investors bought a 19 percent stake in Rosneft.
In December 2016, Rosneft did indeed sell a 19 percent stake in the company, but Reuters reports [8] that it’s not totally clear who bought it because part of the deal was routed through Cayman Islands front companies.
Two months later, the same day Tillerson was confirmed a Secretary of State, Congress gutted a major oil industry anti-corruption rule — a rule that Tillerson had argued against [9] specifically because it would complicate Exxon’s business with Russia.
Step Five: The Writing on the Wall
Even if you discount the scandalous bits from the Steele dossier, there’s a lot to be concerned about here.
For one, it’s completely unacceptable that Congress is rolling back oil industry transparency rules [10] at the same time it confirms an oil CEO as Secretary of State. On top of that, the potential lifting of the Crimea sanctions would give Exxon the chance to drill for Arctic oil that is simply unburnable [11] if we want a livable planet.
What does it all mean? It means the writing is on the wall for the oil industry.
Oil companies have an unsustainable business model [12] in which they constantly need to be finding and drilling new sources of a dirty, finite fuel that fewer and fewer people want [13]. At this point, using the power of U.S. foreign policy (ahem, Tillerson) to stave off the day of reckoning is one of the only options they have left to stay afloat.
Trump is prepared to do everything he can to put the oil industry on life support, but he can’t stop the clean energy revolution.
Senior Research Specialist Tim Donaghy also contributed to this post. By Ryan Schleeter ” http://www.greenpeace.org/usa/5-step-explainer-russian-sanctions-arctic-drilling/
Notes
[1] http://www.huffingtonpost.com/entry/congress-russia-sanctions-bill_us_589b5f85e4b04061313ae824
[2] http://www.greenpeace.org/usa/wp-content/uploads/2017/02/russian-arctic-drilling.jpg
[3] http://www.businessinsider.com/russian-sanctions-have-cost-exxon-over-1-billion-2016-10
[4] http://www.greenpeace.org/usa/the-ceo-of-exxon-is-our-new-secretary-of-state/
[5] http://energydesk.greenpeace.org/2016/12/12/exxon-arctic-russia-sanctions-rex-tillerson-secretary-state/
[6] https://www.documentcloud.org/documents/3259984-Trump-Intelligence-Allegations.html
[7] https://www.buzzfeed.com/kenbensinger/these-reports-allege-trump-has-deep-ties-to-russia?utm_term=.odomxxLZ9#.afJY22d7k
[8] http://www.reuters.com/article/us-russia-rosneft-privatisation-idUSKBN1582OH
[9] http://www.politico.com/magazine/story/2017/02/rex-tillerson-tried-to-get-this-rule-killed-now-congress-is-about-to-do-it-for-him-214725
[10] http://www.politico.com/magazine/story/2017/02/rex-tillerson-tried-to-get-this-rule-killed-now-congress-is-about-to-do-it-for-him-214725
[11] http://www.climatechangenews.com/2015/01/08/arctic-oil-unburnable-in-2c-world-study/
[12] http://www.greenpeace.org/usa/oil-finance-101-what-every-climate-activist-needs-to-know/
[13] https://motherboard.vice.com/en_us/article/we-need-to-accept-that-oil-is-a-dying-industry
[14] http://www.greenpeace.org/usa/nominating-ceo-exxon-secretary-state-reveals-just-desperate-fossil-fuel-industry-donald-trump-rex-tillerson/
What Russian Sanctions Have to Do With Arctic Drilling, In 5 Steps
Note b: “Bellona’s Igor Kurdrik, an expert on Russian naval nuclear waste, said that, “We know that the Russians have an interest in oil exploration in this area. They therefore want to know were the radioactive waste is so they can clean it up before they beging oil recovery operations.” “Russia announces enormous finds of radioactive waste and nuclear reactors in Arctic seas“Published on August 28, 2012 by Charles Digges http://bellona.org/news/nuclear-issues/radioactive-waste-and-spent-nuclear-fuel/2012-08-russia-announces-enormous-finds-of-radioactive-waste-and-nuclear-reactors-in-arctic-seas
Putin was already President in 2002:
“World Funding Pours Into Russia for Nuclear Cleanup and Sub Dismantling, Published on July 16, 2003 by Charles Digges
It may have taken more than a year to kick-start the $20-billion pledges made at the Kananaskis, Canada, Group of Eight industrialized nations conference of June 2002, but, at last, some of the international funding spigots to help Russia deal with radioactive waste from its vast arsenal of decommissioned submarines and other radioactive hazards are opening.” http://bellona.org/news/nuclear-issues/radioactive-waste-and-spent-nuclear-fuel/2003-07-world-funding-pours-into-russia-for-nuclear-cleanup-and-sub-dismantling
“Congress would have at least 30 days to hold hearings and then vote to approve or reject Trump’s easing of sanctions.” (“Trump’s Position Uncertain as US Congressional Leaders Reach Accord on Russia Sanctions“, Last Updated: July 23, 2017 1:29 PM, by Ken Bredemeier https://www.voanews.com/a/us-congress-russia-sanctions-trump-reaction/3955570.html )
Note d: ENI is around 20% owned by the Italian State: https://fr.wikipedia.org/wiki/ENI_(entreprise)
Greenpeace Arctic drilling map: http://www.greenpeace.org/usa/wp-content/uploads/2017/02/russian-arctic-drilling.jpg
Mining Awareness + 
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