BP’s bid to sell the North Sea gas field it owns with Iran could face an eleventh hour delay as the threat of US sanctions raises concern for the industry regulator.
The Oil and Gas Authority (OGA) is expected to pause the £300m deal agreed between the oil major and North Sea minnow Serica Energy late last year because the sale includes the Rhum gas field which is part-owned by Iran’s state oil company.
The deal was expected to close within months but the US decision to overturn the Iran nuclear deal and reinstate tough economic sanctions has reignited political concern over the field which was once shuttered for almost three years as a result of previous sanctions.
Industry sources believe the deal will move ahead but it will need a careful diplomatic “workaround” which can only be revived once the full scope of the US sanctions plans are understood.
The OGA said it is “working with government” and will monitor the US crackdown on Iran “carefully”.
The field was forced to close following the US-EU sanctions against Iran in 2010 before a thawing of relations and powerful diplomatic lobbying helped secure a waiver to allow the field’s gas flows to restart.
The waiver required a legally complex arrangement to siphon off Iran’s share of the revenue which was earned from the field’s gas into an escrow account.
Industry sources say a similar “workaround” is likely to be agreed for Serica once the full scope of the US sanction plans are understood.
But the OGA, which was established years after this political test-bed, “will be nervous” so the close of the deal may well be delayed, an industry source said.
A source close to Serica said the group is “in regular contact with the OGA” as part of the acquisition and would expect the OGA to be “considerably involved” in plans to maintain production at the field.
“But at this stage it is too early to understand the full impact of the US move,” the source added.
Others told The Daily Telegraph that the risk of sanctions is likely to have been held in mind ahead of the deal, which first emerged in The Sunday Telegraph last summer.
Serica agreed to pay just £12.8m upfront for stakes in the Bruce, Keith and Rhumm fields and pay the rest via a share of the field’s proceeds, which eliminated the need for financing from wary banks which have kept their distance from Rhum in the past.
Under the terms of the sales agreement Serica is unable to wriggle out of the deal unless political sanctions, or catastrophic physical damage, halt production from any of the fields.
Serica said it is “carefully evaluating the implications” of the US-Iran fallout and “will update the market, as appropriate, in due course”.
BP said it always takes great care to ensure it adheres to applicable sanctions.