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Daily Telegraph: Now Russia tries to hit Exxon deal

Daily Telegraph image: Rex Tillerson, CEO of ExxonMobil

Exxon-Mobil’s Rex Tillerson

By Russell Hotten
Last Updated: 1:09am BST 21/06/2007

Exxon-Mobil has become the latest western oil and gas company to become embroiled in Russia’s attempt to curtail foreign control of its energy assets.  
State-run gas company Gazprom wants to halt an Exxon-led project from supplying China, in a move that echoes attempts to restrict the operations of Royal Dutch Shell and BP.

Exxon, the world’s largest oil and gas company, run by chief executive Rex Tillerson, said yesterday that it was in talks with Gazprom. “The purpose of the discussions is to find a mutually acceptable option for the parties involved,” Exxon said.

The US company and its partner Neftegas have a deal with the China National Petroleum Corporation to supply gas from its Sakhalin-1 project in far east Russia.

But Gazprom’s deputy chief executive, Alexander Ananenkov, said Exxon’s supply deal, which he claimed was to export 80bn cubic metres of gas a year, would leave Russia short.

However, analysts say the dispute it bound up with Russia’s strategy to claw back control of oil and gas assets that were sold in the 1990s.

Gazprom has its own plans to sell gas to China, but there is a dispute over price. The Russian company is also in talks with TNK-BP, which wants to supply China from the vast Kovykta gas field. But Gazprom has refused permission for the BP joint venture to build a pipeline to China, and the situation looks like being resolved with the Russian company taking control of Kovykta.

Last year, after allegations that Shell had broken environmental licences at its Sakhalin-2 gas field, Gazprom took control of the project. If Gazprom gets its way over the Exxon and TNK-BP projects, the Russian company would exercise total control over supplies to China. Gazprom already supplies 25pc of Europe’s gas needs. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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