22nd May 2018 15:40
LONDON (Alliance News) - Serica Energy PLC said on Tuesday that one of its planned acquisitions in the UK North Sea is affected by the introduction of wider US economic sanctions on Iran as well as transaction with Iranian entities.
In November, Serica agreed to acquire interests in the Bruce, Keith and Rhum fields in the UK North Sea from BP PLC, which together produces 5.0% of UK domestic gas production. Completion of the transaction is on schedule and expected in the third quarter of 2018.
However, Iranian Oil Co (UK) Ltd, a subsidiary of National Iranian Oil Co, currently hold a 50% interest in the Rhum field, and this is affected by the US sanctions as a result.
As a result, Serica and BP have submitted applications for a renewed licence from the US Office of Foreign Assets Control, as the current licence is set to expire at the end of September. In addition, both companies are looking into how the sanctions will affect the granting of licences.
As part of the evaluation process, work to re-complete the Rhum R3 well has been deferred to until the position regarding the US sanctions have been clarified, Serica said.
"As a UK company working to maximise the full recovery of Britain's gas reserves in line with 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," Serica Chief Executive Mitch Flegg.
Shares in Serica Energy were down 2.8% at 68.40 pence on Tuesday.
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