MOSCOW: ExxonMobil is still drilling in the Russian Arctic, a Russian minister said on Friday, in move that if confirmed will anger Washington after the US administration slapped sanctions on Moscow to suspend such operations by Western oil majors.

The joint drilling project in the Kara Sea between Exxon and the Kremlin’s state oil firm Rosneft has become one of the most watched projects by the oil industry after the West ratcheted up sanctions on Moscow for its incursion in Ukraine.

Two previous waves of sanctions have failed to stop Exxon from sending an oil drilling rig from Norway to the Russian waters in August in the hope to confirm billions of barrels of new oil reserves.

Last week, the United States imposed sanctions banning joint exploration activities in the Russian Arctic, shale and deep water resources and giving companies 14 days to suspend projects, including those under way.

“Exxon is continuing exploration drilling in the Kara Sea,” Russian Natural Resources Minister Sergei Donskoi told Reuters. He declined to provide details.

Rosneft declined to comment, Exxon was not available for immediate comment.

Bloomberg reported on Thursday that Exxon had halted drilling Sources close to the project have said Exxon has no US personnel on the rig. The company might also argue that an abrupt stoppage could increase operational and ecological risks, two sources said citing research done by lawyers.

The rig was meant to finish drilling the well and leave the Russian waters in October.

Published in Dawn, September 20th, 2014