Spain’s Repsol has pulled out of a planned joint venture to develop two Arctic oil blocks with Russia’s Gazprom Neft and Royal Dutch Shell, a spokesman at Repsol said May 22.

Gazprom Neft, the oil arm of Russian gas giant Gazprom, Repsol and Shell signed a memorandum of understanding last June on establishing a joint venture to develop the Leskinsky and Pukhutsyayakhsky blocks on the Gydan Peninsula in northern Siberia.

A deal on the venture, in which Gazprom Neft would hold a 50% stake and Repsol and Shell each own 25%, was expected to close this year.

“It’s an option we had on a well we are choosing not to exercise,” Repsol’s spokesman said.

A source at Gazprom Neft said the Russian company will continue to cooperate with Shell on the assets.

“Repsol has informed Gazprom Neft that at the moment, it does not consider a possibility of participation in the project,” the source said.

Gazprom Neft declined to comment.