September 18, 2014 / 11:43 PM / 3 years ago

Exxon halts Arctic oil well drilling on sanctions -Bloomberg

Sept 18 (Reuters) - Exxon Mobil Corp has halted drilling an offshore oil well in Russia's remote Arctic just a few days after the United States and European Union barred companies from helping Russia exploit Arctic, deep-water or shale-oil fields, Bloomberg reported on Thursday.

The United States and European Union were planning to stop billions of dollars in oil exploration in Russia by the world's largest energy companies including Exxon and BP Plc, U.S. government sources told Reuters last week.

Exxon signed a $3.2 billion agreement in 2011 with Russian company Rosneft Oil Co to develop the Arctic. The Texas-based multinational was considered one of the few companies capable of drilling in the harsh, deep waters there.

The two companies were hoping for a major discovery in the Kara Sea.

"We are still assessing the sanctions but will comply with all laws and regulations," Exxon Mobil spokesman Richard Keil told Reuters. He declined to comment on whether the company had stopped drilling the well.

Rosneft Oil was not immediately available for comment.

The U.S. sanctions, meant to punish Russia for escalating tensions in Ukraine, gave American companies until Sept. 26 to stop all restricted drilling and testing services, the report said. (bloom.bg/1rhh7wf)

The well could have tapped into 9 billion barrels of crude - worth about $885 billion at current prices - that is estimated to be deep under the floor of the Kara Sea, the report said.

Exxon and Seadrill Ltd's North Atlantic Drilling unit were under pressure to finish or temporarily seal the $700 million well, the Bloomberg report quoted Chris Kettenmann, chief energy strategist at brokerage Prime Executions Inc as saying.

Russia, along with the United States and Saudi Arabia, is one of the world's top oil producers and is the main energy supplier to Europe. But with conventional oil fields in decline, it needs to move to frontier sources in Siberia and the Arctic to keep the oil flowing.

Exxon's shares were little changed on the New York Stock Exchange on Thursday. (Reporting by Shailaja Sharma in Bangalore; Editing by Lisa Shumaker)

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