When Exxon Mobil Corp. (NYSE: XOM) asked the U.S. Treasury and Energy Departments for an extra two weeks to shut down its joint well offshore of Russia’s northern coast, the company still had about 350 feet to drill before it would know whether there was going to be any oil. Exxon argued that it could not safely shut down operations at the well in the time designated by the U.S. government as new sanctions were put into place against Russia and the country’s major oil companies, including OAO Rosneft, Exxon’s partner in this well.

Rosneft issued a press release Saturday morning reporting that the partners had struck oil at the University-1 well in the Kara Sea, 250 kilometers offshore in 81 meters of water and at a depth below the sea floor of more than 2,100 meters. According to Rosneft, the resource base estimate of just this one reservoir is 338 billion cubic meters of natural gas (about 12 trillion cubic feet) and 100 million metric tons of oil (about 733 million barrels).

The $700 million well is now being sealed. Under the latest round of sanctions, foreign oil companies are barred from providing equipment, technology or assistance to Russian firms to support deepwater, offshore or shale projects.

In its press release, Rosneft also noted the other partners in the project, including Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), Weatherford International Inc. (NYSE: WFT), Baker Hughes Inc. (NYSE: BHI) and FMC Technologies Inc. (NYSE: FTI). Presumably all these firms are also bound by the new sanctions imposed on Russia. Because Russia has not developed significant expertise in these areas yet, the ban effectively brings all such projects to a grinding halt.

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