Exxon to wind down Russian drilling project

NEW YORK (AP) — Exxon Mobil said Friday that it will stop drilling an exploratory well in Russia's Kara Sea in compliance with U.S. sanctions against Russia over Russia's involvement in the Ukraine.

Exxon planned to drill the well between August and October. The latest round of sanctions called for the removal of U.S. workers on projects in the Russian Arctic by Sept. 26.

Exxon said it has received a license from the U.S. Treasury Department to wind down operations, but it is unclear whether the license will allow Exxon to stop drilling on the schedule it had already laid out. Exxon could not be immediately reached for comment.

The Kara Sea project is part of a broad collaboration between Exxon and the Kremlin-controlled Rosneft, Russia's largest oil company. The two aim to explore for oil and gas in technically challenging formations in Russia. These formations are thought to hold large troves of hydrocarbons, but getting at them requires the type of expertise found at western oil companies such as Exxon.

Even if successful, the projects aren't expected to result in new oil and gas production for several years. But they represent an important and possibly enormous resource that could help both Exxon and Russia keep oil production high as current fields naturally deplete.

Exxon shares were up 75 cents, to $97.36 per share in midday trading Friday.