British Gas Field: A Test for US Sanctions Against Iran

British Petroleum (BP) intends to transfer its shares in three gas fields located in British waters in the North Sea to Serica Energy. One of these projects is the 'Rhum' gas field, in which a subsidiary of the National Iranian Oil Company holds a 50% stake. Reuters reported on Saturday, November 25, that BP decided last week to sell its shares in the three gas fields, valued at $400 million, to Serica Energy, but this requires obtaining the necessary permits from the US due to Iran's stake in the Rhum project, especially at a time when the Trump administration is taking a hardline approach towards the Islamic Republic. The report adds that the Rhum field could serve as a test for US sanctions against Iran. The National Iranian Oil Company invested in this gas field six years before the Islamic Revolution and holds half of the project's shares, but operations at this field were halted in 2010 by the British government following intensified sanctions against Iran. Ultimately, with the nuclear agreement between Iran and six world powers, gas production from the Rhum field resumed last year. Reuters states that due to Iran's involvement in the Rhum project, BP requires a license from the US Treasury Department's Office of Foreign Assets Control for American companies and citizens to participate in this project. Currently, Bob Dudley, the CEO of BP, is a US citizen. This license was reviewed by the US government in September—just one month before Trump refused to certify Iran's compliance with the nuclear deal—but Tony Craven Walker, the CEO of Serica Energy, told Reuters that his company would also need to apply for a license to purchase shares in the Rhum field from the US in the coming months. He added that obtaining a license from the US was one of the conditions for his company to transact with BP. BP began its operations over a century ago as the 'Anglo-Iranian Oil Company.' A source at BP told Reuters that the company is lobbying the British government to support Serica Energy's license application from the US government. He stated that the US license is not a prerequisite for continuing operations at the Rhum field, but it is necessary in case of an emergency requiring cooperation with American companies. Mr. Walker also mentioned that his company would undertake the same activities at the Rhum field as BP, and therefore, there is no reason for the US to deny the license. The French company Total, which signed a $5 billion contract to develop Phase 11 of South Pars with Iran a few months ago, was also forced to open an office in Washington last month to closely monitor sanctions and the risks of its activities in Iran. Reuters writes that after Trump refused to certify Iran's compliance with the nuclear deal, the ball is now in the US Congress's court to determine the fate of sanctions against Iran. Congress will decide on this matter next month. Mr. Walker stated that US sanctions pose a significant risk, but they do not necessarily halt operations at the Rhum field unless the European Union and the UK also impose sanctions against Iran, which currently shows no signs of occurring. Recently, Jeffrey Harris, a board member of Serica Energy who was a US citizen, resigned due to his refusal to implement US sanctions regarding cooperation between US citizens and Iran.