The United Kingdom has removed Egypt’s Zohr gas project from the scope of its sanctions regime, despite the participation of Russia’s Rosneft (MOEX:ROSN), the UK Treasury said.

Zohr, the largest natural gas field in the Mediterranean, is operated by Italy’s Eni (BIT:ENI, NYSE:E). Rosneft holds a minority stake in the offshore project alongside Mubadala Energy, the upstream arm of Abu Dhabi’s Mubadala Investment Company. BP (LSE/NYSE:BP) has previously participated in the Zohr development, though its current equity position has been diluted.

The UK Treasury did not provide detailed reasons for the exemption, but the decision effectively allows UK-linked entities to continue activities related to Zohr despite broader sanctions imposed on Russian companies following Moscow’s invasion of Ukraine. The Treasury said the sanctions framework remains under review.

The exemption is likely to be closely watched by energy companies and governments given Europe’s continued reliance on gas supplies from the Eastern Mediterranean. Zohr’s output underpins Egypt’s domestic gas balance and LNG exports, and the UK decision points to a pragmatic application of sanctions where projects deemed critical to regional energy security and supply stability are treated differently from other Russian-linked assets.

Zohr is a cornerstone of Egypt’s gas sector and has played a central role in Cairo’s efforts to boost domestic production, reduce energy imports and position the country as a regional gas hub. The UK Treasury has not indicated whether the exemption is time-limited or subject to specific review milestones.