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    BP/Serica Get US Waiver over Rhum

Summary

The US has allowed the sale of BP assets in three North Sea gas fields to proceed, despite one being part-owned by sanctions target Iran.

by: Mark Smedley

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BP/Serica Get US Waiver over Rhum

BP and UK independent Serica Energy have been granted a conditional US waiver until October 31 2019 in respect of the UK North Sea Rhum gas field that is 50%-owned by Iranian state producer NIOC, effectively allowing for the completion of a major transaction by Serica to proceed.

Serica said October 9 that the “conditional license and assurance” from the Office of Foreign Assets Control (Ofac) – part of the US Treasury Department – will allow both US and non-US entities to provide goods, services and support to Rhum without fear of US sanctions, and thus enable production from the Rhum field to continue unaffected.   

The licence and assurance require certain arrangements to be put in place by November 4 2018 relating to the interest in the Rhum field held by NIOC subsidiary IOC.  Serica said such arrangements are “well advanced” and will provide that all benefits accruing from and relating to the NIOC interest in Rhum field will be held in escrow for such period as US sanctions apply, and that it will exercise no decision-making powers over Rhum during that same period.

Serica said receipt of this US waiver was a major condition for its £300mn ($392mn) acquisition, announced November 2017, of BP's interests in the Bruce, Keith and Rhum fields (BKR) to proceed.  A smaller transaction involving Total will now also be able to proceed, it added.

“Taking these factors into account, BP and Serica have agreed on November 30 as the revised completion date for the BKR Transaction,” the independent said.

Post-completion, BP and Total will each retain a 1% stake in Bruce. A temporary waiver for the Rhum deal was already granted by Ofac last week which was valid until November 4.

Serica CEO Mitch Flegg said: “We welcome the constructive approach taken by all parties.  This outcome protects a valuable British asset which, together with the Bruce and Keith fields, produces about 5% of UK offshore gas production.”