Tillerson holds firm on Russia sanctions during talks with Putin

Washington (Platts)--12 Apr 2017 628 pm EDT/2228 GMT

US sanctions against Russia's energy sector will remain in place until Moscow takes steps to de-escalate violence in Ukraine, US Secretary of State Rex Tillerson said Wednesday after meeting with Russian President Vladimir Putin and Foreign Minister Sergei Lavrov.

"Until full progress is made under the Minsk accords, the situation in Ukraine will remain an obstacle to improvement in relations between the US and Russia," Tillerson said during a webcast press conference with Lavrov.

Tillerson said Russia must de-escalate violence and withdraw separatist armed forces and heavy weapons from Ukraine so international observers could patrol the conflict area.

The sanctions imposed in 2014, after Russia annexed the Crimean Peninsula from Ukraine, froze several major upstream oil joint ventures between Russian and Western companies. ExxonMobil, where Tillerson was CEO before becoming secretary of state, took an estimated $1 billion hit.

Tillerson and Lavrov addressed reporters in Moscow after they met with Putin for more than two hours. Tillerson and Lavrov met for several hours before that. The pair said the US and Russia must work closer together to resolve global concerns like terrorism, but the countries remain far apart on Syria, Ukraine and other key issues.

Lavrov described the conversations as "substantial and very frank." He blamed the fractured relationship in part on "irritants, so to speak, that have piled up," under the Obama administration.

"We are being realistic and we do understand that in order to overcome these obstacles we have to make efforts, and we seek to do that," Lavrov said through a translator.

Tillerson said the pair committed to improving channels of communication.

"I expressed the view that the current state of US/Russia relations is at a low point," he said. "There is a low level of trust between our two countries. The world's two foremost nuclear powers cannot have this kind of relationship."

The meeting included a lengthy discussion of the Syrian war and "possible ways forward," Tillerson said. The pair also agreed that "North Korea has to be denuclearized."

They promised to support initiatives by business circles from both countries to improve trade and investment. They also agreed to designate special envoys from the State Department and Russian Foreign Ministry to have "pragmatic conversations" about areas of tension between the two countries.

--Meghan Gordon,

--Edited by Richard Rubin,

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