If you watch crime family movies, because it is easier to use this example, you will notice crime families occasionally join together at weddings. The idea is to use the offspring to cement relationships and that way the two families can work together rather than kill each other for territory. The premise has been used by Kings and countries for centuries. When President Regan helped end the cold war, American companies were encouraged to do business in Russia. Given Russia has some of the biggest oil and gas fields in the world, it is not surprising to see Exxon Mobil doing joint ventures with Russia’s Rosneft. Things were going well for Exxon until Russia for political reasons try to influence the US elections and the Senate imposed sanctions on Russia. It was relatively easy to pick individuals, but the Senate also want to impose sanctions on economic activity. This is when it gets more difficult, earlier the same government encouraged economic activity with Russia. Now they want less.

In an article by Ernst Scheyder and Vladimir Soldatkin of Reuters, in 2012 Exxon and Rosneft were expecting to spend up to $500 billion in developing oil and gas in the Arctic and Black Sea. The sanctions are to on lands within Russia as it does not include the Sakhalin project off the eastern coast of Russia. In lands north of the Arctic Circle, the joint venture announced a major discovery which was to developed in 2019. Depending on how long sanctions are to be imposed, Exxon may be back in Russia proper, but for now Exxon took a $200 million dollar loss on their operations in Russia.

Linking to dividend paying stocks, when times are good politicians love to embrace the success of companies. When things change, sometimes politicians reverse their love which means the company has to be diversified to wait till the wind blows the other way. Exxon Mobil is the largest oil company in the world and has its operations in many countries where oil can be and is found. Shareholders should be used to politicians using oil and gas as tool for political gain or loss.

There are more questions than answers, till the next time – to raising questions.