one of its gasfields off Britain this week because the field is a joint venture with Iran.
BP said it was shutting down the gasfield because it had never gotten a clear exemption from the European Union’s new sanctions on doing oil and gas business with Iran.
“Pending clarification from the [British] government and to ensure we comply with the required notification period in the [EU] regulations, preparations to suspend production are underway,” Matt Taylor, a spokesman for BP based in Aberdeen, Scotland, said last Thursday in an e-mailed statement. “From the middle of next week there will be no production from Rhum.”
The Rhum field, 240 miles (370 kilometers) off Scotland’s northern coast, is a 50:50 venture with Iranian Oil Co. UK Ltd., a unit of the Tehran-based Naftiran Intertrade Co., which in turn is tied to the National Iranian Oil Co. (NIOC). The joint venture dates back to 1972, long before the revolution.
The EU published regulations on Oct. 27 intended to restrict Iranian business activities and prevent European technology from helping its nuclear program. BP will review the closure when it has received government clarification on the rules, Taylor said.
Clearly, BP hopes the shutdown is temporary. But it has been interpreting the sanctions very narrowly for fear of getting tagged as working with Iran—especially by the Americans, where the BP name has rung very sour ever since the Gulf of Mexico oil spill.
Graham Freedman, a senior analyst at Wood Mackenzie Consultants Ltd. in London, told Reuters that Rhum meets about 2 percent of gas demand on an average UK winter’s day. A current gas glut means the impact of Rhum’s closure will be “limited,” he said.
Iranian Oil Company UK will discuss the possible sale of its stake in Rhum at a board meeting in Lausanne next week or the week after, Hojat Heidari, the company’s executive director, told Reuters. “I don’t think the board is interested in selling to BP,” he said.