British Energy Company Eyes Iranian Oil Market

London-based Serica Energy that recently acquired a stake in Rhum Gas Field, co-owned by Iran, is willing to invest in Iran's lucrative oil market upon the completion of the Rhum project.

Tony Craven Walker, Serica's executive chairman, made the statement in an interview with IRNA in London on Wednesday.

Serica Energy last month bought three fields on the edge of the British North Sea, including the Rhum field, co-owned by the National Iranian Oil Company, from London-based BP.

"Should things go well with Rhum gas field development, we will have close cooperation with Iran to increase crude output from oilfields," Walker added, noting that the implementation of the Joint Comprehensive Plan of Action [Iran's nuclear deal with world powers] has paved the ground for energy giants, including Serica, to expand collaboration with Tehran.

Asked about the newly-bought field from BP, Walker said, "We intend not only to boost the field's production and lifespan but also to cut costs with the help of our partners, namely NIOC.

Pointing to Serica's short- and long-term plans, Walker noted that the company is consulting its partners and as soon as a comprehensive policy is adopted, plans will be developed accordingly.

Walker said Serica and its partner, NIOC, plan to renew drilling of a third well at the Rhum field next year.

Energy experts believe collaboration with international firms for oil exploration/production overseas will help domestic enterprises gain international recognition. So long as Iranian engineers and firms do not take exploratory assignments in other countries, they cannot gain access to the state-of-the-art exploration and drilling expertise.

According to Walker, 120 energy experts will join the mega project and a master plan will be devised by mid-2018 when the much needed equipment is also transferred to the field.

Attaching great importance to the field, he noted that Rhum accounts for 5% of England's natural gas demand that is why expanding its lifespan at least for five years as well as enhancing the production level is of paramount significance.

"The field's life will expire in 2023, yet with the help of NIOC, we are making concerted efforts to expand it as long as 2027," Walker added.

"Serica will be in constant touch with the NIOC, BP and British officials to keep up with the latest development," he added, noting that a snapback of US sanctions cannot affect the British-based independent companies directly.

----- Snapback Scenario

Asked about the impact of sanctions, the official said US trade restrictions do not necessarily impact their operations in Rhum unless the European Union and Britain also implement a snapback and there is no indication that this is likely to occur.

After being forced to shut down in 2010 when international sanctions were imposed on Tehran over its nuclear program, Rhum resumed production in 2013 when Britain agreed to set up a temporary management scheme whereby all revenue due to Tehran would be held until sanctions were lifted.

"Because of the Iranian involvement, Serica needs a license from the US Treasury's sanctions enforcement arm—the Office of Foreign Asset Control— allowing US nationals and companies to take part in the field's operations, especially providing heavy machinery," Walker added.

"The license was renewed in September, a month before Trump sought to reverse the US position on the nuclear deal with Iran. Serica will apply for its own license in the coming months."

Walker said the license is needed as a back-up in case of an emergency that requires US equipment and companies, though it's not a prerequisite to operate the field.