Exxon (NYSE:XOM) and Rosneft Joint Venture Suspended: Sanctions Take a Big Toll on Exxon

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It seems like Exxon finally succumbed to sanctions as Kommersant reported the company suspended its Rosneft joint-venture.

Exxon Mobil Corporation (NYSE:XOM) has finally succumbed to sanctions and suspended its Rosneft Oil Co joint venture, having until mid-October to seize all activity in the region and evacuate its staff allocated in the Russian Arctic.

Contacted, the representatives of Rosneft and Exxon declined to comment.

Rosneft Oil’s CEO, Igor Sechin, stated the companies discovered “liquids” such as natural gas (approximately 11.9 trillion cubic feet) and oil (close to 750 million barrels). The companies intended to drill 40 wells to develop the Russian Arctic but sanctions started to appear being imposed by the EU and the US.

The sanctions targeted the Russian energy sector and limit financing opportunities and joint ventures in the Arctic, preventing US and EU companies from sharing technology to aid in the Arctic region’s development.

Saudi Arabia’s huge developed reserves could be matched by the substantial amount of natural resources the Arctic Region is estimated to have, and this isn’t a small accomplishment. The Russian Deputy Energy Minister, Kirill Molodtsove, already came forward stating that Exxon is to continue drilling right up to the 10th of October, the date which will mark the end of the drilling activities by the Kara Sea.

As a last stand, Exxon and Rosneft decided to go ahead with the development of a $700 million will in the Kara Sea, despite every sanction and new sanction threat airing over the project.