ExxonMobil confirmed Monday that it will wind down its $600 million Kara Sea project because of recently tightened EU and U.S. sanctions against Russia.
ExxonMobil is partnered with Russia’s Rosneft at the Universitetskaya-1 license.
The U.S. Treasury Department granted ExxonMobil and other U.S. contractors working in Russia the time needed to safely wind down operations.
ExxonMobil said it will end its activities as quickly as possible.
U.S. companies must halt projects with Russian energy companies including Gazprom, Gazprom Neft, Lukoil, Surgutneftegaz and Rosneft by September 26.
“The license recognizes the need to protect the safety of the individuals involved in these operations as well as the risk to the environment,” ExxonMobil said.
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.
Drilling was scheduled to last 70 days and was about halfway completed when the new sanctions were imposed earlier this month.
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.