How EXXONS & Tillersons Big International Problems

Became Americas Problems

This is my research on Rex Tillersons own history, strategy and methods while he was at
EXXON. A pattern has emerged where Tillerson has frequently taken huge risks in disputed
areas, (even risking wars) produced fields at maximum rates to make the reserves look good
and then left behind a trail of prematurely depleted fields, environmental problems and
litigation for little or no gain. As shown in the attachment he has repeated this pattern in
country after country and we are still living with the fallout.
Tillerson has said that EXXON is not an American company and he will do what is in the
stockholders best interests. However, when he miscalculates or needs more persuasion, he has
not hesitated to use the full power of the US govt for additional muscle. In effect, he has
practiced that What is good for America may not necessarily be good for EXXON. but What is
good for EXXON is always good for America. He speaks firmly and threatens other countries
with our Big Stick.
If Tillerson is confirmed, you will now be asked to send your children and grandchildren to
protect the dubious claims of giant oil companies to unnecessary and climate threatening oil
and gas resources in disputed areas. If you dont believe me, ask yourself why are we
confronting China this week in the South China Sea for reserves that we should never produce.
Furthermore, why are we quoting Russian and EXXON sources for 1 billion dollars in lost
income due to sanctions? Why do we allow EXXON to make an oil discovery with Russia after
sanctions near the Arctic Ocean when BP and Shell had already walked away from the region?

These and other Tillerson international problems are documented from a geologists
perspective in the cases below.

TILLERSONS INTERNATIONAL PROBLEMS

1 IRAQ -In 2009, EXXON CEO Tillerson committed $50 billion to West Qurna 1 Field, one of
Iraqs largest field near Basra. Economics were poor and they were only allowed less than $2
net per barrel. Four years later when local protests began and production peaked at 20% of
target, EXXON s sold half of their interests.
In 2011, Tillerson risked war in Kurdistan to sign an exploration deal for 6 blocks in
disputed territory. Both the US State Dept. and Baghdad government threatened severe
consequences, but Tillerson refused to wait. Within days after EXXON signed the final contract
in Kurdistan, US talks to extend deadline for troop withdrawal in Iraq failed.
In 2016, after spending $500 million in failed exploration attempts in Kurdistan and
taking Iraq to the brink of war with the Kurds, EXXON relinquished the three blocks in disputed
territory with no production or compensation.

2 INDONESIA In 1999, EXXON merged with Mobil whose largest single production asset was
Natural Gas in Indonesia. In 2001, EXXON was forced to close giant Arun Gas Field in N. Sumatra
because of local human rights protests and security concerns around the perimeter of the field.
Following the 2004 Tsunamis in N. Sumatra, EXXON settled with the local representatives so
that 70% of future gas revenues would remain in the region. This was after an estimated 15,000
people had died in the insurgency. In 2015, EXXON sold its N. Sumatra assets back to
PERTAMINA, the government oil company. Indonesia was left with a depleted 40-year-old gas
field, a huge maintenance and incomplete abandonment bill for obsolete production facilities
and the remnants of an insurgency left without jobs or income.
In 2007, EXXON asked for and received help from the US Ambassador to Indonesia to support
their terms for a lease in the S. China Sea. By 2010, EXXON had renegotiated this lease in the
Natuna Gas Field in an area disputed by China, Philippines, Indonesia and Malaysia and signed a
Heads of Agreement one month after President Obama visited Jakarta.
The Natuna East Field is the largest gas field in Asia, but contains more than 70 % carbon
dioxide. EXXON is committed to $20-$40 Billion in investment after spending $ 400 million on
the project, but has no viable plan to prevent eventual escape of 150 Trillion Cubic Feet of CO2,
potentially the largest single point source of CO2 on the planet. Production of the methane will
not be viable until the oil prices exceed $100 per barrel. Even without agreed upon terms for
the lease, EXXON has refused to relinquish its claims to future production in the gas field.
Indonesia is left defending the gas resources from hostile military forces, but still has no

economic way of producing the field. No company has a practical, proven means of disposing of
the CO2 without impacting the climate.

3 YEMEN- EXXON Yemen YEPC As President of EXXON Yemen, Tillerson played hardball with
the Yemen officials and failed to negotiate a 5-year extension on Marib Field. EXXON YEPC sued
Yemen for nearly $2 billion and EXXON eventually lost in arbitration. Yemen countersued for
environmental issues and reservoir mismanagement and effectively won production worth
Billions in court decision.
Now, Yemen is suffering a proxy war between Saudi Arabia and Iran over the same oil
production.

4 RUSSIA In 1998, Tillerson is appointed as head of EXXON Neftegas in charge of Sakhalin

Island Oil and Gas project off Siberia. By 2009, the Sakhalin project negotiations had stalled and
EXXON asked the US Ambassador to Russia to intervene on Exxons behalf. The joint agreement
was signed in 2011. EXXON holds 30% and operates this very deep and expensive project.
Through technology transfer, EXXON have helped Russia drill the deepest well (nearly 45,000 ft.)
and 9 of the 10 longest reach wells in the world despite sanctions against Russia and Igor
Sechin, the head of Rosneft. In 2015, EXXON filed a complaint against Russia claiming it
overcharged $500 million in Sakhalin taxes.

In Aug 2011, six months after BP Russian subsidiary TNK nullified the same cooperation
agreement, ExxonMobil signed a deal with Russian oil company Rosneft to develop the EastPrinovozemelsky field in the Kara Sea and the Tuapse field in the Black Sea. EXXON would pay
$3.2 Billion for one third interest and agree to invest tens of $Billions initially. Exxon agreed to
trade shares with Rosneft for participation in West Texas Projects,30% of Exxon's Gulf of
Mexico leases and projects in Alberta, Canada.
In 2012, ExxonMobil concluded an agreement with Rosneft to assess possibilities to produce
tight oil in Western Siberia. When the US imposed sanctions against Rosneft in 2014 for Russia
annexing Crimea, ExxonMobil had to delay its development plans with Rosneft resulting in a
potential loss of up to $1 Billion. Exxon pleaded with the US State Dept. for additional time to
remove their equipment and used the extension to confirm a major oil discovery in the Kara
Sea before evacuating. Russia was left without adequate equipment or financing. No company
has the proven expertise to deal with a major oil blowout, (like BP in the Gulf of Mexico) under
offshore Arctic Conditions. A giant offshore spill above the Arctic could have disastrous
consequences for the environment and the climate.

5 CANADA EXXON and subsidiary IMPERIAL OIL are heavily invested in the Athabasca Tar
Sands of Alberta estimated at 5 billion barrels or about 35% of all their liquid holdings. Tillerson
strongly supported the KXL pipeline to bring tar sands to Louisiana refineries and EXXON
lobbied heavily for its approval.
EXXON has sunk hundreds of millions in Syncrude, Kearl field and Cold Lake which depend
heavily on high oil prices for diluted bitumen (dilbit) combined with new energy intensive
technologies for economic justification. Tillerson misrepresented how many of these reserves
were proven under current economic conditions and a revision could seriously impact the
Canadian economy. A reassessment of the value of these assets (as many of the other majors
have already done) could affect stockholders value. Many expect that the company will soon be
forced to writedown the (proven?) value of most of these reserves due to unrealistic cost and
price projections. Tillerson has defended EXXONs models despite recent SEC concerns. It could
force them to debook 4.5 billion barrels of oil or 20 % of their total liquids.

6 GERMANY Beginning as early as 2011, EXXON pleaded frequently with Secretary of State
Clinton and later Kerry to try to influence Fracking policy in Germany. Environmental activists
there wanted a moratorium or ban on all fracking operations. Per cables released under the
FOIA, Exxon presented an Action Plan which involved State Dept. Officials emphasizing the
benefits of shale gas and direct lobbying of German govt. agencies. These efforts were
unsuccessful as Germany banned fracking in 2016.

7 NIGERIA In May 2010 EXXON/MOBIL spilled a million gallons of oil into the Niger Delta from
a broken pipeline to an offshore platform. Local protesters claimed they had been beaten by
security guards near the EXXON/MOBIL facilities and are demanding $1 billion in compensation.
In May, the company temporarily declared force majeure. By Nov. they reported 4 separate
spills in six months. EXXON/MOBIL was cited for the use of dispersants near the coast which
were considered against environmental standards.

8 THAILAND-EXXON Khorat Inc. Tillerson is listed as President of Exxon Thailand in his resume.
He spent $300 million to achieve peak production at EXXONs Nam Phong Gas Field and then
recoverable gas reserves estimates were slashed by 75%.

9. INFINEUM It has recently been reported that, under Tillerson, EXXON circumvented US
Sanctions against rogue states in Syria, Sudan and Iran by using a European subsidiary called
Infineum. These joint venture arrangements made sanctions less effective and weakened the
US negotiating positions. This made it more likely the US would resort to force to achieve its
objectives.

10 MISC AFRICAN COUNTRIES

Equatorial Guinea EXXON has a long history in this country and has continued to do business
with the leader of the country and his son despite widespread corruption. Tillerson continued
to make payments to the leaders even after he learned that the oil revenues were being
deposited into a Washington Bank directly into their personal accounts rather than the
treasury. He testified that EXXON was only required to deal with the leader and what happened
to the funds afterward was an internal matter.
Under Tillersons leadership, Exxon has also invested heavily in Angola and Chad, two countries
plagued with troubling human rights records of abuse. EXXON investments have propped up
these corrupt regimes and made US attempts to improve human rights more difficult.
David Lincoln
1/22/2017