Iran-Held UK Gas Field Continues Work After Meeting U.S. Sanctions Conditions

The Rhum gas field in the UK North Sea—in which a unit of the National Iranian Oil Company holds 50 percent—will continue operations after meeting the final condition under the U.S. sanctions on Iran, the field’s future operator, UK’s Serica Energy, said on Monday.

All benefits to the Iranian firm from the Rhum field will be held in escrow for the period in which U.S. sanctions on Iran’s oil industry apply, Serica said, noting that thus the final condition for the license issued by the U.S. Office of Foreign Assets Control (OFAC) has been met.

“These arrangements provide that all benefits accruing from and relating to IOC’s interest in the Rhum field will be held in escrow for such period as U.S. sanctions apply and ensure that neither IOC nor any direct or indirect parent company of IOC will derive any economic benefit from the Rhum field during that period. IOC will also exercise no decision-making powers in respect of Rhum during the same period,” Serica said.

“The arrangements enable third party service providers to continue to provide services unhindered and production from the Rhum field to continue uninterrupted.”

In early October this year, OFAC granted Serica Energy and BP a license to continue operating the Rhum field. The license will also allow the two companies to complete a deal under which Serica will acquire BP’s total share of the field.

The completion of all these arrangements also fulfils a condition of the Serica deal announced in November 2017 under which Serica will acquire BP’s interests in the Bruce, Keith, and Rhum fields.

Serica has also signed deals with Total and BHP Billiton to buy further interests in the Bruce and Keith fields. All three transactions are expected to complete on November 30, 2018. After the transactions are completed, Serica UK will hold 50 percent of the Rhum field, 94.25 percent of the Bruce field, and 91.67 percent of the Keith field, and will become the operator of the fields.

By Tsvetana Paraskova for Oilprice.com

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