BP Plc said it’s too early to know whether its North Sea Rhum natural-gas field venture with Iranian Oil Co. U.K. Ltd. will shut because of planned European Union sanctions against the Middle Eastern nation.
“It’s premature to say Rhum will have to be shut in,” Matt Taylor, an Aberdeen, Scotland-based company spokesman, said by telephone. “We’ll be studying the details carefully to make sure we are in compliance with the new EU regulations.”
The regulations will be published by the EU tomorrow and come into force immediately. EU governments joined the U.S. in July in imposing curbs on Iran’s energy industries, banks and shipping companies, seeking to force the clerical regime to halt uranium enrichment and stop any pursuit of a nuclear weapons capability.
Day-ahead gas pared losses to trade 0.5 pence lower at 48.4 pence a therm as of 5:05 p.m. in London. That’s equal to $7.68 a million British thermal units. A therm is 100,000 Btus. The contract earlier fell as much as 1.8 percent to 48 pence a therm. Gas for the first quarter of next year climbed 0.35 pence to 50.9 pence a therm.
While the project won’t be banned outright, the EU’s prohibitions on technology transfer and new investment in ventures with Iran may have an impact, the European Commission said.
“This is an intended effect of the legislation, and it shows that the U.K. authorities are ready to take the difficult decisions that are necessary to make the sanctions effective,” the commission said in a statement. Iranian Oil wasn’t immediately able to comment.
U.K. North Sea gas production is declining at a rate of about 10 percent a year, data from the Department of Energy and Climate Change show. Britain, Europe’s biggest gas user, is increasingly turning to tanker-borne imports of liquefied gas to meet demand.
Rhum, in production since 2005, pumps as much as 6 million cubic meters of gas a day, along with some liquids, Taylor said. The field is “an important source of gas and tax revenue for the U.K.,” he said. BP and Iranian Oil each hold 50 percent of the asset.
Gas from the field passes through the Bruce platform, about 30 miles (48 kilometers) away, and is transported via Total SA’s Frigg pipeline on to the St. Fergus terminal in Northern Scotland. Output from Bruce wouldn’t be affected by the closure of Rhum.
BP won an exemption from the planned sanctions for its Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan, a person familiar with the decision who declined to be named said on Oct. 22.
Iran holds a stake in Shah Deniz, a possible source of gas for the Nabucco pipeline, an EU-backed project designed to reduce the bloc’s reliance on natural gas from Russia. Norway’s Statoil ASA and Paris-based Total SA are also involved in the project.