Image courtesy of Gazprom Neft.

Royal Dutch Shell suspended work on its Siberian shale joint venture with Gazprom Neft Friday in order to comply with the most recent round of western sanctions against Russia.

Russia’s state owned Gazprom said it will continue to work on the shale project by itself.

The project is located in the Bazhenov shale formation in western Siberia.

According to the U.S. Energy Information Association, Bazhenov has estimated total reserves of 1.24 trillion barrels.

Gazprom said Thursday it had started drilling the first horizontal exploration well in Bazhenov.

Shell said the sanctions will impact some of the company’s current and planned Russian projects and it is working with authorities and its partners to determine just how large the impact will be.

Gazprom Neft Chief Executive Alexander Dyukov said that Shell is talking with regulators to determine if it can continue working on the shale joint venture, Russian news agency Interfax said.

Shell’s suspension comes a week after ExxonMobil announced it is winding down activities at its Kara Sea joint venture with Rosneft.

The new sanctions took effect in early September and prohibit Western companies from working with Russian firms to explore or produce in deepwater, offshore Arctic and shale plays in Russia.

Western companies must wind down transactions with Russian energy companies including Gazprom, Gazprom Neft, Lukoil, Surgutneftegaz and Rosneft.

ExxonMobil was granted an extension by U.S Treasury Department that moved its deadline to halt work to next week.


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