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Diplomacy

ExxonMobil CEO Rex Tillerson's close ties with Russia

Rex Tillerson, head of ExxonMobil, looks set to be the USA's next secretary of state. The decision by President-elect, Donald Trump, has had a positive reception in Moscow.

At the economic forum held in St. Petersburg in mid-June, Tillerson (pictured above, left) was asked whether the US would be lifting sanctions against the Russian oil and gas industries. He responded that his position was similar to that of his friend, Igor Sechin, head of the Russian state-owned oil company Rosneft: "Let's put our hopes in the government."

But only six months later, it turns out that the ExxonMobil boss will be part of making this decision - as a member of government. President-elect Trump announced on Tuesday that Tillerson is his preferred choice for the influential position of US secretary of state. The Senate still has to approve his nomination.

As usual, the initial response from Moscow has been muted, with no obvious signs of jubilation. In a first reaction, a Kremlin spokesperson said, "Many Russian officials, not only the president, have had good business relations with this man."

Tillerson is widely regarded as a solid character who holds independent views.

The reaction from the chairman of the Duma's Foreign Affairs Committee, Konstantin Kosachev, has been considerably more optimistic. He wrote on Facebook that Tillerson's relationship to Russia had been a deciding factor in his nomination. "Trump is consistent and his statements about Russia were not just empty talk during the election campaign." Kosachev believes that Tillerson's nomination sends a clear signal to the US elites, as well as the rest of world, including Russia, that "a new era is on the way."

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Trump to name Exxon CEO as top diplomat

Contacts from the 1990s

Indeed the news should be welcomed in Moscow. The future of US-Russian diplomatic relations will be determined by a man who has had close dealings with Russia for almost 20 years and who has at his disposal excellent connections to the upper echelons of power in the Kremlin. In 2013, President Vladimir Putin awarded Tillerson with the Order of Friendship of the Russian Federation for his "major contribution in strengthening collaboration in the energy sector."

Tillerson's close ties to Russia go back to the late 1990s, when Boris Yeltsin was in power and Moscow was taking a pro-Western path. The Texan oil manager ran Exxon projects in the resource-rich country, firstly off Sakhalin Island in the Russian Far East. American and Russian companies also worked together closely on the oil fields in Siberia. 64-year-old Tillerson has met Putin many times and is a regular guest at the Kremlin chief's prestigious St. Petersburg economic forum.

A friend from Putin's inner circle

However, Tillerson's closest contact in Russia appears to be his friend Sechin, the head of Rosneft. Like Putin, he apparently served as an officer in the Russian secret service during the Soviet era. Russian media has described Sechin as a particularly influential businessman who is part of Putin's inner circle.

In 2005, in an interview published in the Russian business daily, Vedmosti, Tillerson praised Russian managerial skills as being the reason behind his company's success in the country.

A new era of warmth for frosty relations?

Rosneft's Igor Sechin is part of President Vladimir Putin's inner circle

Rosneft's Igor Sechin is part of President Vladimir Putin's inner circle

Rosneft, as well as Sechin personally, have been hit by Western sanctions that were imposed due to Russian actions in the Crimea and Eastern Ukraine. The Russian company relies on Western investment and know-how for drilling in areas that are difficult to access. ExxonMobil has estimated that its losses in 2015 due to the sanctions against Russia were around 1 billion US dollars.

Tillerson has publicly said that he does not support the sanctions and his company seemed to bow unwillingly to pressure from Washington. In August 2014, after sanctions had been imposed, ExxonMobil began a collaborative project with Rosneft, drilling in the Kara Sea on the edge of the Arctic Ocean.

Putin gave the go-ahead for test-drillings for oil via video conference. Yet only weeks later, the US oil giant put the collaboration with its Russian partner on hold. If the new US administration lifts sanctions against Russia, this project may be set to continue.

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