Exxon Mobil Corporation (NYSE:XOM) to stop drilling in Russian arctic due to sanctions
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Everyone is aware of the sanctions issued against Russia by the U.S government. Exxon Mobil Corporation (NYSE:XOM), in the wake of these sanctions, stopped working on an oil well in Russia- a project that could’ve gotten them billions. The sanction, which forbids companies to deal or trade with Russia in any way, has already cost many companies major profits.
The sanction primarily hits the oil sector of Russia but what the U.S government doesn’t realize is the fact that it’s an immature step and is causing the U.S itself, billions of dollars. U.S had given a deadline till 26th of this month to any company that was carrying out work in Russia.
Exxon Mobil Corporation (NYSE:XOM) had just started drilling a week back until the word came down from Washington that they will have to speed up because of the sanctions. Exxon Mobil Corporation (NYSE:XOM) has already spent a large amount of their revenue in this project and were expecting a huge return and unlimited future prospects.
Exxon Mobil Corporation (NYSE:XOM) was given a week’s extension but they say that during such a short time they won’t be able to carry out the work. The license will expire; meaning hundreds of dollars will go to waste.
Exxon Mobil Corporation (NYSE:XOM) was hoping for a major crude discovery in Kara Sea, located in the Russian arctic. Exxon Mobil Corporation (NYSE:XOM) had made a deal with the Russian company called Rosneft, for $3.2 billion back in 2011.
Analysts claim that many companies related to energy and oil sectors will suffer huge losses because of these sanctions. The U.S government should tailor these sanctions in a way that they help out the companies in carrying out there projects which need due time and rigorous work.
The sanctions look to slow the progress of Russia which is the world’s largest crude producer but with a dwindling situation, looking for new sources.
Exxon Mobil Corporation (NYSE:XOM) will be concerned about the fact as to how to stabilize the well before leaving work on it. The project was supposed to cost $600 million and end later this year but it seems the project will be extended by 2 to 3 years.
Exxon Mobil Corporation (NYSE:XOM) has already spent 6 million in lobbying for the project; losing so much money means that their position on the stock market will drop too, leaving the investors unhappy.
The U.S treasury department said that it doesn’t make any comments on the sanctions it orders, and the state policy must be abided by. Officials from the U.S treasury said that it has given the corporations as much time as it could to finish their work.
The U.S-Russia heat is taking a toll on the companies that thrive on trades and foreign projects. On the other hand, the stock market is suffering which means a crash is imminent in the future. To get rid of these problems, the U.S and Russia must come to a deal and end this political unsavory behavior towards each other – for the greater good.