ExxonMobil will halt work at most a week short of its original deadline for drilling a 7,709-foot-deep well in a Russian Arctic field that could be the world’s largest discovery in years, according to a senior Russian official. The plans, if accurate, make it appear all but certain that the company will meet its aims for the project despite Western-led sanctions directed at Russia’s next-generation oil production.
Hard information is sparse since neither ExxonMobil nor the US government have said precisely when the company will walk away from the Universitetskaya well, located in the Kara Sea and thought to contain 9 billion barrels of oil. ExxonMobil has released the only comment, which is that Washington has extended a Sept. 26 deadline, allowing for safe withdrawal from the well.
That cast doubts on whether ExxonMobil had time to produce the well logs necessary for an initial determination whether the Universitetskaya field contains commercial volumes of oil. If the company fell short, this drilling season would have been all-but wasted, since it would not meet the company’s objective for the well, which was to discover what lay below the surface.
But according to Kirill Molodtsov, Russia’s deputy energy minister, drilling will come to a halt on Oct. 10. Since ExxonMobil spudded the well Aug. 9, and drilling was to take 70 days, that meant that the drilling, cementing, plugging and abandoning the well was to finish by Oct. 18. Unless the company experiences unusual difficulty drilling and cementing the well, there is little chance that eight days will prevent completion. Quartz previously reported that that the extension seemed to be sufficient time to finish the well—and now Molodtsov’s remarks make concrete specifically how much has been shaved off the drilling schedule: not much.
ExxonMobil’s strategy is probably to make the commercial determination and, if the news is positive, hope that tensions between the West and Russia over the Ukraine invasion soften by drilling season next summer or even 2016. The sanctions are intended to pressure Russian president Vladimir Putin into concessions on Ukraine by threatening his country’s future oil revenue, which funds more than 40% of the state budget.
In a statement, ExxonMobil told Quartz:
Given the complexity of the University-1 well and the sensitive arctic environment in the Kara Sea, ExxonMobil sought, and was granted, limited relief from the recently issued Treasury Department sanctions to enable a safe and orderly wind down of operations related to this exploration well.
The Kara Sea project and the University-1 well was the subject of our application for a slightly extended compliance period because operations were at a critical stage and additional time was required to safely wind down activity, especially given the sensitive arctic environment.