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Oil & Minerals
Tillerson at the helm

Trump’s Arctic card?

Editor’s Briefing | The nomination of Rex Tillerson as the next US secretary of state points to a continued role for America in the region
Oil & Minerals
Binding agents (Photo: Kremlin)

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While campaigning to become America’s next president, Donald Trump expressed a wish to establish a friendlier relationship with Russia. In this case, it would have been wise to take Mr Trump both literally and seriously.

The president-elect’s nominee to become secretary of state, announced officially today as Rex Tillerson, the managing director of ExxonMobil, an oil firm, received the Order of Friendship from the Kremlin in 2013. The medal is given to foreigners who have worked to improve relations with Russia.

Rumours of the nomination had already caused opponents of oil-drilling to wince: Mr Tillerson (pictured above left), whose entire career to date has been with Exxon, would, they expect, be a staunch promoter of policies that will bolster America’s position as the world’s third-largest oil producer.

SEE RELATED: Trump, Thule and America’s uncertain Arctic future

Most of the talk for now is about how Mr Tillerson’s background as an oilman and his close ties to Vladimir Putin will affect America’s relations with Russia’s oil industry. Here, the Arctic plays a big role for both. On its website, ExxonMobil touts nearly a century of experience in various parts of the region. Many of its operations are still active; in the areas where it is not, it expects to return.

Like other Western firms, ExxonMobil’s activities in the Russian Arctic are on standby. Western sanctions, imposed in 2014 in response to suspicion that Moscow was involved in the eastern-Ukrainian separatist movement, forced North American and European oil firms to pull out of their Russian energy partnerships in the Arctic.

Prior to that, ExxonMobil was working with Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft to develop offshore fields in the Kara Sea, as well as on the Yamal Peninsula.

The sanctions have sent Russia scrambling to find non-traditional investors, including oil firms in China, India, Japan and Vietnam. This is a situation Mr Tillerson foresaw in 2014, when he lamented the sanctions in a speech to shareholders.

“We always encourage the people who are making those decisions to consider the very broad collateral damage of who are they really harming with sanctions and what are their objectives and whether sanctions are really effective or not,” Mr Tillerson said at that time.

SEE RELATED: Victory in the Arctic

This echoes Mr Trump’s own sentiment about the sanctions, and has led those looking for a bit of optimism about the development of the region to embrace the arrival of both men in office.

Mr Tillerson is an unorthodox choice as secretary of state, but not one that stands out particularly in a cabinet that is quickly becoming a collection of generals and Wall Street bankers.

Although an outsider, particularly among the diplomats and other foreign-policy officials he will now control, he reportedly comes highly recommended by establishment figures, including Condoleezza Rice, a former secretary of state herself, and Robert Gates, a former head of the CIA, America’s foreign spy agency.

Diplomacy, likewise, will not be an unknown art to him: ExxonMobil is described by some as a quasi-state with nearly 100,000 employees, and an economy that, despite shrinking by half in 2015, is still around the size of Finland’s.

SEE RELATED: My rival’s rival

A CV of that sort, Mr Trump made clear in a statement, would serve the new secretary of state, and Washington, well. “He will promote regional stability and focus on the core national security interests of the United States,” he wrote.

Despite the focus on Mr Tillerson’s ties to the oil industry, America’s Arctic interests are about more than oil. Security, for example. Those who have watched Russia’s resurgence in the region through lenses fashioned during the Cold War will be another group taking solace in Mr Tillerson’s ties to Moscow: he will have a keen understanding of the importance of the Arctic as a region to the Kremlin, making it less likely to slide off the policy agenda.

Much needs to be learned before it is known how this will translate to policy, but even before the November 8 election, concern that there would not be one at all was palatable among officials and would-be policy influencers in Washington.

For example, one of the eventualities that must be thought about is the possibility that the secretary of state decides to skip the biennial meeting of Arctic Council foreign ministers, to be held in Fairbanks on May 11.

SEE RELATED: Be prepared for realpolitik over arktik politik

Not attending would break a streak that has seen America’s top diplomat take part in the past three ministerial meetings. However awkward it might be for the current chair of the Arctic Council not to send its foreign minister, it would not set precedent, neither for America (which first sent a secretary of state to such a meeting in 2011) nor for other countries. During the 2015 meeting in Iqaluit, for example, Moscow was represented by Sergei Donskoi, its environment minister, rather than Sergey Lavrov.

The official explanation for Mr Lavrov’s absence was a busy schedule. But on-lookers were convinced this was a diplomatic way of saying the Kremlin was unhappy with the Western response to the the situation in Ukraine and Moscow’s annexation of Crimea.

The friendlier tone towards Moscow emerging from Washington could make similar speculation in the run-up to the Fairbanks meeting unnecessary.

For now, however, any discussion about Mr Tillerson as secretary of state remains hypothetical. Before he can assume office, he must be confirmed by the Senate. Mr Trump’s Republican Party holds a majority there, and a shared affinity for the oil industry will work in his nominee’s favour. Some senators have expressed concern, however, about the cozy relations between a Trump White House and the Kremlin. In this case, being well connected may not grease the wheels as much as the incoming president or his nominee would like.