Moscow, Russia - The appointment of Rex
Tillerson, ExxonMobil's CEO, as the new
US secretary of state was a shock to
many - mostly because of his lifelong
employment at one of the world's largest
oil companies and friendship with
Russian President Vladimir Putin.
The friendship between the ex-KGB spy
and the Texan oilman - they're both 64
now – dates back to the late 1990s when
Tillerson established the biggest presence
of a US oil company in Russia, and Putin
was a fledgling politician who had just
been appointed prime minister in ailing
president Boris Yeltsin's government.
In 2013, Putin handed Tillerson a
pentacle-shaped Friendship Medal, one
of Russia's highest award for foreigners,
for "special merits in development of
bilateral ties with Russia".
Donald Trump names Rex Tillerson as secretary of state
A year earlier, Tillerson presided over a
multi-billion deal that was designed to
help Moscow tap into the immense oil
Bonanza in the Arctic - but fell through
because of Western sanctions imposed
after Crimea's 2014 annexation.
Tillerson lambasted the sanctions that
cost his company billions of dollars in
lost profit.
And now, when Tillerson is a fledgling
diplomat and Putin is a seasoned, iron-
fisted politician, Kremlin critics wonder
whether these amicable ties will mark a
U-turn in Washington's dealings with
Moscow.
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nominees
"This appointment is very beneficial for
Putin," Vladimir Milov, Russia's former
deputy energy minister now in
opposition to the Kremlin, told Al
Jazeera.
Tillerson will create "an environment
that is much more comfortable for Putin
that the previous architecture of trans-
Atlantic cooperation, a certain unified
West with its own certain values", he
said.
Russia's annexation of Crimea , support
to separatists in eastern Ukraine, and
pro-Damascus operation in Syria has
sunk ties with the West to Cold-War
lows.
But the jingoistic, neo-conservative, and
pragmatic course chosen by president-
elect Donald Trump starkly contradicts
years of Washington's policies towards
containing Russia - and strangely fits the
Kremlin's own political agenda.
No more lectures on democracy?
For most of his rule, Putin wanted the
West to treat Moscow as an equal and
detested reprimands for his crackdown
on opposition figures , corruption, and
concentration of key industries around
state-run corporations.
Analysts insist Trump's approach will be
much more businesslike.
"Russia's leadership has proclaimed
pragmatism as the basis of its foreign
policy a long time ago. If the US will
share the same foreign policy principle, I
don't think there will be any problems,"
Alexey Mukhin, head of the Moscow-
based Center for Political Information
think-tank, told Al Jazeera.
Pro-Kremlin pundits are already ecstatic
about the appointment.
"This is a positive development so
unexpected that we still don't believe it's
happening," Kremlin advisor and
political analyst Sergei Markov told Al
Jazeera.
Profiting on Russia
In 1998-1999, Tillerson served as vice
president of Exxon (before the
company's merger with Mobil) in charge
of operations in the Caspian Sea and on
Sakhalin, Russia's largest Pacific island
north of Japan.
Dealings with Russian authorities
weren't always easy. In April 2015, the
company sued Russia at the Stockholm
arbitrage court claiming it overpaid
profit tax on the Sakhalin project.
But Tillerson soon found himself among
Moscow's most trusted Big Oil
executives.
In September 2005, Putin met with
Tillerson - ExxonMobil's president at the
time - as well as with the company's
then-CEO Lee Raymond, and top
managers of Conoco-Phillips and
Shevron-Texaco.
Months earlier, oil tycoon Mikhail
Khodorkovskywas sentenced to nine
years in jail for alleged fraud in what
was widely seen as the Kremlin's
revenge for his financial support to the
opposition. International investors were
worried about the imprisonment, and
the meeting was an attempt to reassure
them that Moscow was still a reliable
partner.
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Most of Khodorkovsky's oil company,
Yukos, soon became the bulk of state-run
Rosneft, ExxonMobil's main Russian
partner and its nation's largest oil
company. Igor Sechin, a former
Portuguese translator and Putin's key
ally often described as the second-most
powerful man in Russia, heads Rosneft
now.
He is also a good friend of Tillerson,
according to Russian and Western media
reports.
Arctic oil dream
In 2011, ExxonMobil outmaneuvered oil
giant BP to help Russia develop the
world's largest treasure chest of
untapped hydrocarbons.
The Arctic Circle holds some 90 billion
barrels of yet undiscovered but
technically recoverable oil, about one-
seventh of the world's undiscovered oil
reserves - as well as billions of cubic
metres of natural gas, according to a
2008 assessment by the US Geological
Survey.
Russia's share of the reserves is at least
41 percent of oil and 70 percent of gas,
according to Norwegian officials. But
Moscow lacked the deep-drilling
technologies and equipment - and that's
where ExxonMobil stepped in.
In 2011, Putin oversaw the signing of a
"strategic" deal between Rosneft and
ExxonMobil to develop three oil-and-gas
fields in Russia's Arctic - in exchange for
shares in six ExxonMobil projects in the
United States.
"I'd like to emphasise the exclusiveness
of these decisions for Russian companies
... that until today were not able to
develop existing deposits in the US,"
Sechin told the Interfax news àgency
Tillerson attended the ceremony and
said in a statement the deal "takes our
relationship to a new level and will
create substantial value for both
companies". ExxonMobil said it would
spend $3.2bn to explore the fields that
would give it access to tens of billions of
barrels of oil.
The drilling began in 2014 but the deal -
along with another joint development in
western Siberia - was frozen because of
sanctions over Crimea, and ExxonMobil
reportedly lost $1bn.
Sechin and Rosneft were blacklisted as
part of the sanctions.
Tillerson told ExxonMobil's shareholders
"we always encourage the people who
are making those decisions to consider
the very broad collateral damage of who
are they really harming with sanctions".


www.aljazeera.com/news/2016/12/analysis-state-chief-perfect-fit-russia-161214163241006.html