BP Restarts North Sea Gasfield Half-owned By Iran

Tehran, Oct 19, IRNA - BP has recommenced production at one of the UK’s most important North Sea gasfields, half-owned by National Iranian Oil Company, nearly four years after the oil major was forced to halt output because of sanctions against Iran. The oil group confirmed on Friday that gas had begun to flow out of the Rhum field, 250 miles off Scotland’s northeast coast, which until its closure in November 2010 had been contributing around 4-5 percent of Britain’s total gas output, the Financial Times reported. A thaw in diplomatic relations between western governments and Iran, which owns a 50 percent stake in the field, led to permission in October last year from the UK’s Department of Energy and Climate Change for production to begin once more at Rhum. However technical difficulties and safety concerns have led to a delay of a year for output to resume. Rhum is half owned and operated by BP, but the Iranian Oil Company has a 50 percent stake in the field, which was discovered in 1977. BP said it would take two to three days for gas flows from the field to feed through Rhum’s platform systems to allow for eventual delivery. The oil company is expecting initial output at Rhum to be held at 50m cubic feet per day. The field’s peak output capacity had initially been expected to reach 300m cubic feet per day. Britain’s Department of Energy and Climate Change said, “The government supports the resumption of production at Rhum, which is necessary to avoid potential environmental damage and will prevent the possible destruction of the value of the field and its important contribution to the UK’s annual gas production.” Revenues owed to Iran from renewed production at Rhum will be held, for now, by the British government in a frozen account until a full resolution over sanctions emerges. An Iranian analyst talking to 'Iran Daily', published Sunday, said that Iran expects immediate payment of its share by the BP regardless of sanctions. Production from the field, which supplied four percent to five percent of Britain’s demand before its shutdown, is expected to begin this weekend. BP received approval from the British government to resume production after the government put the field under a temporary management scheme whereby all revenue due to Tehran will be held until sanctions are lifted, the spokesman said. The field started pumping gas in December 2005 and cost £350 million ($565.6 million) to build. The British government gave the green light for the resumption late last year in order to avoid damage to the high pressure, high temperature gasfield./end