Exxon CEO says Russia sanctions aren’t affecting business

05/28/2014 11:58 AM

05/28/2014 11:59 AM

U.S. sanctions against Russian officials are having no effect on Exxon Mobil’s operations in that country, CEO Rex Tillerson said Wednesday after the company’s annual shareholders meeting.

Sanctions imposed over Russia’s annexation of Crimea have targeted the president of Russia’s largest oil company, Rosneft, but not the company itself. Exxon has an exploration and production agreement with Rosneft in the Russian Arctic and Siberia.

“There has been no impact on any of our business activities in Russia to this point, nor has there been any discernible impact on the relationship” with Rosneft, Tillerson told reporters. “The organizations continue to work business as usual.”

Tillerson said he generally opposes sanctions as imprecise and ineffective and said he has discussed his view with U.S. officials. Separately on Wednesday, U.S. Sen. Ted Cruz told reporters while traveling in Europe that the U.S. should review the Exxon-Rosneft deal, saying that sanctions against Russia should be increased.

While Irving-based Exxon Mobil’s revenue and profits both declined last year, environmental debates once again crowded out financial concerns at the annual meeting of the nation’s largest oil company.

About 15 people protested across the street from the meeting at the Morton H. Meyerson Symphony Center, charging that Exxon is not doing enough to reduce climate change and develop alternatives to burning oil and natural gas.

Inside the hall, a dissident shareholder and Dominican sister from New Jersey, Pat Daley, said Exxon is making a long-term business mistake by not moving more aggressively into alternative fuels. She said the company is betting “that the nations of the world will continue to do nothing about climate change for the next 30 years.”

Tillerson expressed confidence that technology will provide a way to reduce emissions and said proponents of ideas such as hard emissions-reduction goals are simplistic.

Tillerson said he doesn’t trust any models that predict certain changes in global temperatures and climate. He also said that climate change has no single answer and that people in developing countries still desire the same living standards as those in developed countries.

Only 22 percent of the company’s shares were voted in favor of a shareholder proposal calling for Exxon to set goals for reducing greenhouse gas emissions. That’s less than the 27 percent the measure won last year.

Shareholders also rejected proposals calling for an annual report on lobbying, an explicit prohibition of employment discrimination based on sexual orientation, limits on directorships and majority vote for directors.

Shareholders, in a “say on pay” vote, supported the company’s executive compensation by 90 percent, a sizable increase over 71 percent last year.

Tillerson said the company, which owns Fort Worth-based XTO Energy, has reduced greenhouse gas emissions by nearly 11 million tons the past five years, which he described as equal to taking nearly 2 million cars off the road.

Exxon predicts that alternative fuels will grow but that oil will remain the world’s leading energy source for another quarter-century, accounting for one-third of all energy use in 2040.

Staff writer Jim Fuquay contributed to this report, which includes material from the Houston Chronicle.

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