Rhum sanctions issue raises UK energy security fears

21 August, 2018
Source: Platts

A deadline is looming for BP and its partners to win a waiver of US sanctions that will allow continued production from the Rhum natural gas field in the North Sea, and failure to win a concession could jeopardize the transfer of BP's interest in the field to Serica Energy.  

Without a waiver, however, the deal is in doubt as the current license from the OFAC expires on September 30.

Iran's stake in the Rhum license was granted in 1972. A year later, rising Middle East tensions would lead to the OPEC oil embargo, but close ties between the UK and Iran continued. BP traces its origins back to Iran through the emergence of Anglo-Persian Oil Company.

Hopes that Rhum might be excluded were raised by the US' decision this month to waive sanctions on a vital gas project for Europe, the Southern Gas Corridor, in which National Iranian Oil Company holds a 10% stake.

However, the Trump administration's position on Rhum remains unclear. Energy security arguments, that the field is needed to avert UK dependence on Russia, a key rationale for the Southern Gas Corridor, may struggle to gain traction.

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