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Russian CEO with potential stake in Point Thomson banned from U.S. travel

Dermot Cole
Point Thomson, on Alaska's North Slope, is considered critical to development of a major natural gas pipeline. Business Wire photo

FAIRBANKS -- The chief executive of a potential partner in the Point Thomson gas and oil field on Alaska’s North Slope is banned from visiting the United States.

Igor I. Sechin, 53, president of the Russian oil giant Rosneft, is a close associate of Russian President Vladimir Putin who has been singled out by the Obama administration for sanctions. Those include a freeze of any assets Sechin has in the U.S. The penalties do not apply to the company he runs, however.

On April 28, in response to the crisis in the Ukraine, the White House added Sechin and six others to the list of those blocked from visas. Obama administration officials described Sechin as part of the “inner circle” of Putin’s advisers. The New York Times referred to Sechin as the most powerful of those targeted and a former Soviet military intelligence officer. The paper labeled him Putin’s “lieutenant in the energy business.”

The U.S. has not imposed any sanctions on the corporate operations of Rosneft, which is controlled by the Russian government and does business with many multinational firms.

In early 2013, Exxon Mobil Corp. and Sechin signed a “heads of agreement” at Putin’s house in Russia, setting out a process under which Rosneft could acquire one-quarter of Point Thomson, a field crucial to the development of a major natural gas pipeline in Alaska.

“Participation in the Point Thomson project will increase Rosneft’s access to the latest gas and condensate field development technologies used in harsh climatic conditions,” Sechin said in a press release issued after the signing.

The Point Thomson deal is just one element in an extensive series of partnerships developed between the Texas oil company and the Russian firm in recent years, covering operations in Alberta, the Russian Arctic, the Black Sea and the Gulf of Mexico.

For Exxon, Point Thomson development is proceeding under terms set out in a 2012 court settlement with the state of Alaska for production of 10,000 barrels of oil a day by 2016. Additional development and production may depend on whether a natural gas pipeline is built across Alaska.

The Russian firm has not exercised its option on Point Thomson, Exxon Mobil Alaska Production Manager Karen Hagedorn said this week.

She said the Sechin sanctions will have no impact on the development of the gas and oil field. If a gas pipeline proceeds and Rosneft pursues its option, the state could one day end up being partners with the Russian firm, along with Exxon, BP, ConocoPhillips and TransCanada.

At Exxon Mobil’s annual meeting in May, CEO Rex Tillerson that the company’s work in Russia has not been slowed by sanctions against his Russian partner. He said Exxon Mobil does not support sanctions, and he told reporters, “We're having conversations such that our views are being heard at the highest levels.”

Both Exxon Mobil and BP signed recent agreements with Sechin’s company to increase their collaboration. Among other things, Exxon Mobil is working with Rosneft on an LNG export project in the Russian Far East.

On the same day the sanctions against Sechin were announced, the RIA Novosti news agency announced agreements between Rosneft and Exxon Mobil for new projects in the Chukchi Sea, Kara Sea and Lapetev Sea.

Rosneft, which is 20 percent owned by BP, was a leading sponsor of a recent conference in St. Petersburg at which executives of Exxon Mobil and BP spoke, despite White House requests that they boycott the meeting.

“I think Exxon Mobil is very, very pleased to be working with Rosneft in this joint venture,” Stephen Greenlee, Exxon Mobil exploration president, told the St. Petersburg conference, participating in a panel that included Sechin.

Another participant, Bob Dudley, BP chief executive, said it is a “great privilege” for his company to be a 20 percent owner of Rosneft. Dudley said he was glad to hear Putin encourage investment in shale development at the conference and said long-term deals and trust are essential.

“We work in a world today too often where the politicians only can look about 18 months out before the next election. There are countries like Russia and agreements with China that are trying to look out 25, 30, 40, 50 years. That’s what we have to do as companies.”

“We are very pleased to be a part of the Russian energy complex,” Dudley said.

Asked about the sanctions during the St. Petersburg conference, Sechin said there was no justification for them. He said it was counterproductive to discuss the topic because that would raise its significance.