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The National Iranian Oil Company (NIOC) is still negotiating with the UK over the release of revenues Iran is owed from a 50-percent interest in the Rhum gas field in the North Sea operated by BP (NYSE:BP), Iran’s Mehr news agency reported on Wednesday, quoting NIOC managing director Ali Kardor.
A NIOC subsidiary, Iranian Oil Company (UK) Limited holds 50 percent in the high-pressure, high-temperature Rhum field, which was brought into production in 2005 and accounted for up to 5 percent of the UK gas output before production was suspended in November 2010 due to the international sanctions against Iran.
The daily production during the five years of operations had reached around 190 million cubic meters. The field is believed to contain an estimated 800 billion cubic feet of gas. Iran has not been able to recoup its share of the revenues from this field, which were frozen in a London account under the sanctions regime.
According to the Mehr agency on Wednesday, Kardor confirmed that “at present, the Iranian side is not able to withdraw the amount from its account”.
In October 2014, BP resumed gas production at the Rhum field. A year before that, in October 2013, the UK government said it had taken the necessary steps to allow BP to restart production in the field. At the time, the UK cabinet also added:
“IOC will receive its share of the revenues from gas sales at Rhum. As IOC is currently designated under EU Iran sanctions, these will be placed in a frozen account.”
According to the Financial Times, revenues owed to Iran from the resumption of production at Rhum would be held by the UK government in a frozen account until a “full resolution over sanctions emerges”.
In its 2015 annual report released in March of this year, BP said that it recorded gross revenues of US$104.5 million related to its interests in
Rhum and that it currently intends to continue to hold its ownership stake in the Rhum joint arrangement and act as operator.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.