Iranian stake threatens Sercia Energy’s North Sea

Iranian stake threatens Sercia Energy’s North Sea

People close to Sercia Energy’s deal to buy out BP and Total from a number of North Sea oil and gasfields could be brought to a close in November, if the US does not provide a waiver allowing it to operate one of the assets that the National Iranian Oil Company also has a stake in.

The proposed deal that would see Sercia acquire the Rhum, Bruce and Keith field, which account for 5% of the UK’s gas production, is dependent on the AIM quoted firm obtaining a license from the Office of Foreign Assets Control allowing equipment and service providers to work with the 50% National Iranian Oil Company owned Rhum field, post 4th November.

If the license is not granted for the £300 million BP deal, Sercia will also pull out of plans with Total for the Bruce and Keith fields, worth $20 million.

Stricter sanctions have been enforced upon foreign companies working with Iran following the US withdrawal from the Joint Comprehensive Plan of Action, which would force Rhum, which alone contributes 3% of the UK’s output, to cease production if it does not get approval from US authorities.

Although Rhum has a license from Ofac to provide goods and services from US companies under the pre-existing sanctions, the second round due to be in place on 4th November will also apply to non-US citizens conducting business with Iran.

The closure of the field would have a significant impact on the UK’s gas supply, which has already witnessed a 50% increase in wholesale prices, as a result of higher demand for LNG and the exhaustion of reserves.

Sercia chief executive, Mitch Flegg, said the firm was working to resolve the issues with the UK Government and Ofac.

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