Conditional Exemption of Iran-Britain Joint Gas Project from US Sanctions

After months of negotiations, the United States has finally exempted the Iran-Britain joint gas project in the North Sea from sanctions. This new permit is conditional on the establishment of an account where all revenues related to Iran from this field will be deposited until the sanctions remain in place and will be blocked until the next decision by the US. The National Iranian Oil Company invested in the Rhum gas field in the North Sea near Norway six years before the Islamic Revolution, and this project reached the operational stage in 2005. However, BP halted the project in 2010 due to sanctions against Iran, and gas production from the Rhum field resumed after the sanctions were lifted. Iran holds a 50% stake in this project. Serica Energy, a British company set to purchase the Rhum field from Britain, announced on Tuesday, October 9, that the US has extended the permit for providing services, selling equipment, and allowing citizens of this country to enter the Rhum project for another year (until October 31, 2019), expressing hope that the exemption from US sanctions will continue beyond this date. It is still unclear why the US has removed this project from the blacklist, unlike previous sanctions, but the Rhum field, along with two other fields that are to be transferred by British Petroleum to Serica, accounts for about 5% of gas production in the UK, with a production of approximately 2 billion cubic meters of gas. The government of Donald Trump has been trying for years to reduce Europe's dependence on gas imports from Russia as much as possible. Last year, Russia exported 16 billion cubic meters of gas to the UK. The Shah Deniz gas field in Azerbaijan has also been developed to reduce Europe's dependence on Russian gas, and Iran also holds a 10% stake in this field. The US has exempted this project from sanctions as well. BP was supposed to transfer its share of $403 million in the Rhum field and two other fields to Serica Energy. Serica Energy states that with the receipt of the one-year exemption permit from US sanctions, one of the main conditions of the field transaction has been resolved, and this contract could be finalized by the end of this month. The US has promised that companies involved in the Rhum project will not face secondary US sanctions. Russian gas exports to Europe have steadily increased over the past few years, despite US objections and concerns. According to official statistics from Gazprom, which monopolizes gas exports through its pipelines, Russia increased gas exports to Europe by 14 billion cubic meters last year, bringing the total to over 192 billion cubic meters. Russia claims that this figure will increase by another 7% this year. Gazprom is currently constructing the Nord Stream 2 pipeline with an annual capacity of 55 billion cubic meters and the TurkStream pipeline with a capacity of 33 billion cubic meters to Europe, which will be completed by the end of next year. However, much of the capacity of these projects serves as a replacement for the cessation of Russian gas exports through Ukraine to Europe, which has in turn fueled serious concerns for the US and some European countries. In 2014, Russia annexed Crimea, which was part of Ukraine, and has faced sanctions from Europe and the US as a result.