Boston, MA 09/15/2014 (wallstreetpr) – Exxon Mobil Corporation (NYSE:XOM) is starting to feel the impact of standoff between Russia and Ukraine. The New York Times reports that the company’s plans appear to have been dashed, with the recent round of sanctions imposed on Russia by the European Union and the U.S.
Sanctions on Russia
The United States of America has imposed sanctions on Russia that particularly take aim of Exxon Mobil Corporation (NYSE:XOM)’s project in the Arctic Ocean. The U.S. government has ordered all American companies to stop exports to Russian explorations, within the next 14 days. The U.S and European Union have already imposed sanctions targeting Russia’s push for arctic offshore and onshore shale rock drilling.
Exxon has confirmed that its lawyers are going through the new wave of sanctions as the company tries to see the severity of the sanctions. There is also a likelihood that Exxon Mobil Corporation (NYSE:XOM) might be looking for ways around the new sanctions as it seeks to continue with its operations in Russia.
Impact of the Sanctions to be felt in the Long-run
The sanctions are not expected to affect Exxon’s earnings as profits from drilling in the arctic are expected to be’ realized after a decade of meaningful oil productions. The main challenge for Exxon Mobil Corporation (NYSE:XOM) at the moment is the fact that its relationship with the Russian government could be affected if the sanctions continue coming, especially from the U.S government.
Exxon Mobil has been pushing for production in the arctic sea especially with the exhaustion of its oil reserves in Venezuela and other countries, which have become unfriendly to western oil companies. Despite the ongoing sanctions, Russia Energy sector has showed minimum signs of a slowdown. Exxon Mobil Corporation (NYSE:XOM) has interests in Russia through its partnership with Rosneft. Their partnership results in the production of 140,000 barrels of oil a day, which reportedly translates to less than 50,000 barrels of oil for Exxon.
