Report: Exxon, Rosneft halt Kara Sea drilling

ExxonMobil and Rosneft have reportedly put drilling operations in the Kara Sea, off the Russian north coast, to a halt.

According to Bloomberg, which cited sources familiar to the matter, the companies have stopped drilling at the Universitetskaya-1, the Russian Federation’s northernmost well, in the wake of sanctions imposed by the U.S. and the European Union last week.

More precisely, the U.S. Treasury on September 12, 2014, imposed sanctions that prohibit the exportation of goods, services, or technology in support of exploration or production for Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil, to five Russian energy companies – Gazprom, Gazprom Neft, Lukoil, Surgutneftegas, and Rosneft – involved in these types of projects.

According to a statement on the Treasury website, all U.S. persons and companies have until September 26, 2014 to wind down applicable activities and transactions according to the above mentioned sanctions, imposed by the West against Russia, for its involvement in the Ukraine crisis.

The Universitetskaya-1 well, spudded in early August, has been described as “the most important event of the year for the global oil and gas industry” by Igor Sechin, Rosneft CEO.

The well was drilled using the West Alpha semi-submersible drilling rig, owned by North Atlantic Drilling. As for the plugged well, it will probably be on hold until next year at the earliest, Chris Kettenmann, chief energy strategist at Prime Executions Inc. told Bloomberg.

According to Rosneft, which has quoted ‘experts’, the volume of the Kara Sea oil province resources exceeds the oil and gas resources the Gulf of Mexico, the Brazilian shelf, the shelf of Alaska and Canada, and it is comparable to the resource base of Saudi Arabia.

Also, Dolphin Geophysical, a Norwegian seismic survey company, today announced that its Kara Sea operations are not subject to the current trade restrictive measures against Russia.