Serica Still Needs US Waiver for Rhum Deal
UK independent producer Serica claimed September 28 that “good progress [has been] achieved on all elements of the transaction to acquire BP interests in the Bruce, Keith and Rhum [BKR] fields”.
Completion of that $400mn pending deal with BP agreed ten months ago, and a more recent $20mn one with Total for stakes in Bruce and Keith only, are on target for November 1 to enable regulatory approval processes to complete, said Serica in its 1H results.
However it has no guarantee yet that the US will give it a waiver to enable the Rhum field to produce – which is needed as the 50% not held by BP belongs to Iranian state NIOC, subject to US sanctions.
Serica said: “Constructive discussions have been held with the relevant UK and US authorities to meet these wider conditions. To provide more time for the authorisation processes to be completed, the completion schedule has been extended but we remain on track to complete the transactions with BP and Total and are hopeful that authorisations will be forthcoming to enable us to complete in this timeframe.”
Serica reported a 1H net loss of $8.4mn (1H2017: $10.3mn profit) resulting from suspension of Erskine production for most of 1H2018, and transition expenditure required on the BKR transaction. If the waiver is issued and both deals completed, Serica will assume operatorship and be the major partner in the Bruce, Keith and Rhum fields with 78.25%, 59.83% and 50% interests respectively.
If the US waiver is not issued, the deals with BP and Total are almost certain to be called off. BP meanwhile told NGW later Sept.28: "The transaction is ongoing and due to complete in November."
Serica noted that production from the Chevron-operated UK North Sea Erskine gas/condensate field, in which it has an 18% interest, was suspended January 16 and remained so throughout 1H2018 due to a blocked export pipeline carrying Erskine condensate from the Lomond platform to link into the Forties Pipeline System. It said a new 26km section of pipe has now been laid, with production expected to resume shortly.
In July, Chevron announced it was putting its central UK North Sea fields, including Erskine, under review - widely interpreted as code for a possible sale - while it has confirmed talks with possible buyers of its UK West of Shetland Rosebank undeveloped oilfield asset.