Trump administration refuses to let Exxon Mobil drill for oil in Russia

The Trump administration has denied a request from Exxon Mobil Corp. to waive U.S. sanctions against Russia to allow the company to resume oil drilling around the Black Sea.

Treasury Secretary Steven T. Mnuchin said Friday in a brief statement that the administration “will not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions.”

Exxon said it understood the decision, while suggesting that the outcome will merely help European oil companies operating under less-stringent restrictions.

The decision comes two days after the news that the energy giant was seeking a waiver to resume a joint venture with Rosneft, a Russian state-owned oil company.

Secretary of State Rex Tillerson was Exxon Mobil’s chief executive before joining President Trump’s Cabinet. While at the company, he cultivated close ties with Rosneft and Russian officials including President Vladimir Putin, and he spoke against sanctions that were imposed in 2014 in response to Russia’s annexation of the Crimea region of Ukraine.

The sanctions bar U.S. oil companies from transferring to Russia the advanced technology that is used to drill more efficiently offshore and in shale formations. Exxon Mobil has said in regulatory filings that the sanctions could lead to losses of up to $1 billion.

The Irving, Texas-based company has disclosed receiving three waivers from the sanctions during the Obama administration for limited work with Rosneft. The company applied in 2015 for a waiver to allow Black Sea drilling, according to a person familiar with the matter who spoke anonymously because the process is confidential.

Exxon Mobil’s critics urged the Treasury Department to block more waivers, which they feared would give new momentum to drilling in the environmentally sensitive Russian Arctic.

Shares of Exxon Mobil fell 0.4% to $80.69 on Friday.

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UPDATES:

1:45 p.m.: This article was updated with a comment from Exxon.

This article was originally published at 1:30 p.m.