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BP has had to stop work on one of its North Sea gas fields due to the reintroduction of US sanctions on Iran in the wake of Donald Trump`s decision to withdraw the US from the Iran nuclear deal.
BP owns 50 per cent of the Rhum gas field. while the Iranian Oil Company holds the other half.
The company said in a statement to the BBC: “To ensure that all operations can be undertaken to the highest safety and environmental standards during the interim sanctions period. BP has decided to defer the commencement of work on [Rhum] while the position relating to US sanctions is being clarified.“
BP is currently in the process of selling its holding to Serica Energy. a UK oil and gas company based in the North Sea.
Serica said on Tuesday that it remains committed to the deal. as does BP. and expects it to complete in the third quarter of this year.
However. Serica added that as IOC owns 50 per cent of the field. operations are affected by US sanctions. “in particular. the new sanctions regime announced by the US government on 8 May“.
BP is entitled to carry out certain operations at the Rhum field under a licence granted by the US Office of Foreign Assets Control. which expires on 30 September. Both BP and Serica have applied to OFAC to renew the licence. but the resumption of sanctions is “expected to result in a change of US policy in respect of the granting of OFAC licences“. Serica said.
Mitch Flegg. Serica`s chief executive. said: “We will be working with our partners and the UK government to identify measures. acceptable to the US authorities. to protect safe and efficient Rhum operations and ensure maximum economic recovery of reserves from this valuable UK resource. We are receiving full support from all the relevant UK authorities in these efforts.
“All aspects of completing the transaction remain on track: an Aberdeen office has been identified. key staff are being recruited by Serica. and the transition process of moving operational staff and contracts from BP to Serica is well advanced. All parties are working to see a successful completion.“
Oil prices were boosted by the renewed tension between the US and Iran. rising above $80 a barrel late last week. Although Brent crude has dropped back somewhat. the price was up 0.7 per cent mid-morning Tuesday at $79.78.
