It's Always About The Oil: Rex Tillerson Edition

If there is one common thread amongst Trump's cabinet nominees, it's their close ties to the petrochemical industry and their vast interest in foreign oil in order to reap huge profits.

Last week, Rachel Maddow reported on how Tillerson and Exxon-Mobil operate as their own country without regard to United States policies or much else.

This week, The Guardian reports, he has deeper ties than being the CEO of Exxon-Mobil. He was also chairman of the board of a US-Russian oil company in 2001.

Tillerson – the chief executive of ExxonMobil – became a director of the oil company’s Russian subsidiary, Exxon Neftegas, in 1998. His name – RW Tillerson – appears next to other officers who are based at Houston, Texas; Moscow; and Sakhalin, in Russia’s far east.

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Though there is nothing untoward about this directorship, it has not been reported before and is likely to raise fresh questions over Tillerson’s relationship with Russia ahead of a potentially stormy confirmation hearing by the US senate foreign relations committee. Exxon said on Sunday that Tillerson was no longer a director after becoming the company’s CEO in 2006.

ExxonMobil’s use of offshore regimes – while legal – may also jar with Trump’s avowal to put “America first”.

I spent the weekend reading Steve Coll's excellent 2013 book on Exxon-Mobil. I highly recommend everyone do it.

Coll reports that the impetus for the merger between Exxon and Mobil in the late 1990s was a way for Exxon to merge their huge cash assets with Mobil's offshore assets in order to partner with the still-newly liberated Soviet countries. This directorship is likely an offshoot of that corporate strategy.

The problem here is that it is now 2016, and things aren't as friendly between the Americans and the Russians, but no matter to Tillerson. He's used to operating as his own satellite without regard to the usual loyalties to country.

It is by corporations, for corporations and of corporations now. This is what Tillerson brings to the table -- a disdain for long-standing foreign policy in favor of enriching Exxon-Mobil. Here's one way his corporation stands to benefit, should he be confirmed.


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Tillerson’s award [from the Russians] followed a 2011 deal between ExxonMobil and Rosneft to explore the Kara Sea, in Russia’s Arctic.

It was put on hold in 2014 after the Obama administration imposed wide-ranging sanctions against Russia. The sanctions were punishment for Putin’s Crimea annexation that spring and Russia’s undercover invasion of eastern Ukraine.

The ban covers the US sharing of sophisticated offshore and shale oil technology. Exxon was supposed to halt its drilling with Rosneft. The firm successfully pleaded with the US Treasury department to delay the ban by a few weeks, with the Kremlin threatening to seize its rig. In this brief window Exxon discovered a major Arctic field with some 750m barrels of new oil.

Tillerson has criticised the US government’s policy on Russia. In 2014 he told Exxon’s annual meeting that “we do not support sanctions”. He added: “We always encourage the people who are making those decisions to consider the very broad collateral damage of who they are really harming.”

It is widely assumed by investors that the new Trump administration will drop sanctions. This would allow the Kara joint venture to resume, boosting Exxon’s share price and yielding potential profits in the tens of billions of dollars. According to company records, Tillerson currently owns $218m of stock. His Exxon pension is worth about $70m.

It would be a mistake to ignore what Trump is trying to do here. When we speak of a coup, we're really talking about how oil billionaires banded together to put a man in office who would let them have their way with energy and foreign policy.

We must continue to oppose Tillerson's nomination. It is not enough to shake our fists about this. It's imperative that you call your Senators' offices and register your disapproval of this nominee, and that is particularly important for those of you who live in states with Republican senators.

And get Steve Coll's book. It's a big fat, interesting, fact-filled journey over Exxon-Mobil's pathway to power.

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