Exxon Mobil withdraws from Russia deal due to sanctions

MOSCOW – U.S. oil company Exxon Mobil says it will withdraw from its joint venture with Russia’s state-controlled Rosneft due to U.S. and European sanctions against the country.

Exxon Mobil had signed a deal with Rosneft, Russia’s biggest oil producer, in 2011 that looked to drill in difficult terrain, like Russia’s Arctic waters. It combined Exxon’s technology with Rosneft’s access to the area.

The deal came under strain, however, after the U.S. sanctioned Russia in 2014 over the invasion of the Crimean Peninsula. Exxon has applied for a waiver but without success. The deal is under extra scrutiny because Exxon’s CEO at the time of the deal was Rex Tillerson, now secretary of state.

Exxon said in its earnings result Wednesday it expects to withdraw from the joint venture this year.