Image courtesy of Rosneft.

The U.S. Treasury Department granted ExxonMobil a two week extension Tuesday to comply with U.S. and EU sanctions against Russia and wind down its operations in the Kara Sea.

The new deadline for ExxonMobil to halt work at its $600 million Kara Sea joint venture project with Russia’s Rosneft is October 10.

The joint venture will continue drilling until the deadline, Reuters said.

ExxonMobil said Monday it will wind down work at the Universitetskaya-1 well in the Kara Sea as quickly and as safely as possible.

Drilling was scheduled to last 70 days and was about half done when the new sanctions were imposed earlier this month.

ExxonMobil did not disclose how close to completion the well will be when it stops work.

The most recent round of EU and U.S. sanctions against Russia stipulate that companies must halt projects with designated Russian energy companies including Gazprom, Gazprom Neft, Lukoil, Surgutneftegaz and Rosneft by September 26.

The Universitetskaya-1 well is part of a $3.2 billion joint venture between ExxonMobil and Rosneft that includes plans to drill at 40 prospects by the end of 2018.

The block covers 49,000 square miles and could contain up to 9 billion barrels of oil.

Universitetskaya-1 could be worth as much as $900 billion.

Official estimates put Kara Sea reserves at around 36 billion barrels of oil.


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