Update 3:35 p.m. EDT 

Exxon announced on Friday that the U.S. Treasury Department had granted it a temporary license to continue working past the Sept. 29 deadline.

“We’re following this short time extension to ensure a safe and environmentally responsible completion of the well,” Exxon spokesperson Richard Keil told International Business Times. “The license is non-renewable and no further work is permitted.” 

Original story begins here. 

Exxon Mobil Corp. may or may not be pulling out of a massive drilling operation in Russia amid a looming deadline to comply with Western sanctions.

On Thursday, Bloomberg reported that sources with knowledge of the operation said the oil company would be pulling out. On Friday morning, Russia’s Natural Resource Minister Sergei Donskoi told Reuters that “Exxon is continuing exploration drilling in the Kara Sea,” declining to comment further.

As of yet, Exxon’s spokesperson has declined to comment.

The Irving, Texas-based Exxon has been working with OAO Rosneft, Russia’s largest oil drilling company, and North Atlantic Drilling, which is owned by Norwegian shipping firm Seadrill Ltd., on an Arctic drilling project in Russia’s Kara Sea. Together, the companies have worked to assess and survey the area, which is thought to hold as much as 9 billion barrels of oil, worth nearly $900 billion. 

Because of the harsh Arctic conditions, Russian firms often require help from Western companies like Exxon, which have the resources and equipment necessary to pull off the massive offshore operation in such environments. 

As tensions in Ukraine increased steadily this year, Exxon and other oil companies kept ties with Russia, sending representatives to the St. Petersburg International Economic Forum in May despite discouragement from the White House. 

Russia's President Vladimir Putin hailed the decision, and said he was "convinced that the joint projects between Rosneft, Exxon Mobil and other companies will benefit our national economies, will contribute to strengthening the global energy situation," according to Reuters

In its second-quarter earnings report last month, the company confirmed that it would continue operations in the Kara Sea

But last week, the Obama administration imposed yet another round of sanctions last week that banned exports of goods, or technology that would support Russian Arctic offshore, deepwater or shale projects and partnerships with Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft. The companies have until Sept. 26 to “wind down applicable transactions with these entities.”

“It would be a real setback for Exxon,” Charles Erbinger, director of the Energy Security Initiative at the Brookings Institute, told International Business Times. “They have been very successful in dealing with the Russians -- not only on this project in the Kara Sea.”

He said a great deal of the company's long-term strategy depends on tapping “one of the last great prospects for a super-giant oil field.”

Erbinger explained that American or European oil companies are in a tight spot amid the growing tensions. Obviously they want to comply with any legal obligations, but many of their strategies extend for decades in the future.

“It’s a long-term business,” he said. “They don’t want to risk that someone else gets to the table.” 

In response to the Bloomberg report that Exxon would be pulling out, the head of Greenpeace International's Arctic oil campaign took the opportunity to warn other firms about working in the region. 

"Other oil companies must surely be looking at Exxon's [$600 million] gamble and wondering whether their own partnerships are worth the risk," he said in a public statment Friday morning. "The Russian Arctic poses unique technical and environmental challenges at the best of times, but especially in a period of major geopolitical tensions." 

Experts say that these latest sanctions will also block billions of dollars in future exploration investment from other companies such as BP, Total and Royal Dutch Shell, which also have partnerships with Russian firms.