Work to re-complete a well at the strategically important Rhum gas field in the UK North Sea has been postponed while current operator BP and prospective buyer Serica Energy assess the full impact of the US decision earlier this month to renew sanctions against Iran.

Serica agreed in November to acquire BP’s 50% interest in Rhum, which produces about 5% of UK gas and in which Iranian Oil Company, a subsidiary of National Iranian Oil Company, is the 50% non-operating partner.

Serica said this week both itself and BP remain “fully committed” to completing the deal — which also includes BP’s operating interests in the Bruce and Keith fields — on schedule in the third quarter.

Serica said BP has been reviewing operations scheduled to take place before the implementation of the new US sanctions, which follow US President Donald Trump’s decision to pull out of the Iran nuclear deal.

This included work to re-complete the Rhum R3 well, which was due to start this week.

“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 R3 while the position relating to US sanctions is being clarified,” Serica said. The company said that it expects the US announcement to result in a change of policy in how licences from the US Office of Foreign Assets Control (OFAC) are granted.

Some services at Rhum are provided under an OFAC licence that is set to expire on 30 September.

Serica said applications have been submitted to renew the licence and meetings are scheduled with OFAC in the next few weeks.

A condition for completion of the transaction is the issuing of a new OFAC licence to Serica.

“Serica and BP are both committed to resolving the issue of US sanctions as they apply to Rhum with a view to enabling a timely completion of the [Bruce, Keith and Rhum (BKR) transaction] in the third quarter of 2018 and safeguarding ongoing operations,” Serica said.

Serica's chief executive Mitch Flegg said: “As a British company working to maximise the full recovery of Britain’s gas reserves in line with Oil & Gas Authority (OGA) and UK government policy, 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.”

Weekly

BP and Serica take stock at UK Rhum gas field