Serica, BP give themselves extra time to complete North Sea transaction

The Bruce platform in the North Sea
The Bruce platform in the North Sea

Serica Energy and BP have given themselves an extra month to complete a transaction involving a North Sea field partly-owned by Iran.

The firms initially expected to completed the deal during the third quarter, but they now hope to get it over the line by early November.

The deal, first announced in November 2017, will give Serica stakes in the Bruce, Keith and Rhum (BKR) fields.

Rhum is 50% owned by the national oil company of Iran, which is the subject of US sanctions.

Serica and BP have been trying to obtain dispensation from the US authorities “to ensure ongoing safe and efficient operations” on Rhum.  

They hope the extension will give them enough time to complete “outstanding regulatory and partner consent processes”, including those involving the US Office of Foreign Assets Control.

Serica said the terms of its deal with BP, and a subsequent agreement to buy Total’s interests in Bruce, “remain unchanged”.

Mitch Flegg, Serica chief executive, said: We have taken the decision to extend the completion period on BKR as a practical measure that provides additional time for the approvals process to complete. 

“We are working closely with the various authorities and with field partners to satisfy all remaining conditions and we appreciate the commitment that the relevant parties are making as we near completion of this complex transaction. 

“Serica is well prepared to assume operatorship of the assets.  Together with BP, we remain fully committed to completing the BKR deal.

“Completion of these important transactions will enable Serica to assume operatorship and optimise the full performance of these valuable UK offshore assets, extend producing life where possible and ensure maximum recovery of remaining reserves. 

“Coming at a time of strong gas prices and significantly improved oil prices the company is set to benefit from the resultant strong cash flows which have occurred since the start of the year, as well as from resumed production at Erskine which is expected to occur later this month as planned. 

“We look forward to achieving these objectives and remain on track to do so.