Serica Energy plc announces that the conditions of the License relating to the UK North Sea Rhum field, issued by the U.S. Office of Foreign Assets Control (“OFAC”) to Serica Energy (UK) Limited and BP in respect of the interest in the field held by the Iranian Oil Company (UK) Limited (“IOC”), have now been met in full.

These arrangements provide that all benefits accruing from and relating to IOC’s interest in the Rhum field will be held in escrow for such period as U.S. sanctions apply and ensure that neither IOC nor any direct or indirect parent company of IOC will derive any economic benefit from the Rhum field during that period. IOC will also exercise no decision-making powers in respect of Rhum during the same period.

The arrangements enable third party service providers to continue to provide services unhindered and production from the Rhum field to continue uninterrupted.

The completion of these arrangements fulfils a condition precedent of the sale and purchase agreement announced in November 2017 under which Serica UK will acquire BP’s interests* in the Bruce, Keith and Rhum fields. Serica has also announced the signature of sale and purchase agreements with Total E&P (“the Total E&P Transaction”) and BHP Billiton  to acquire further interests in the Bruce and Keith fields. All three transactions are expected to complete on 30 November 2018. Following completion of these transactions Serica UK will hold 50% of the Rhum field, 94.25% of the Bruce field and 91.67% of the Keith field and will become operator of the fields.

Mitch Flegg, Chief Executive of Serica Energy, commented:
“Completion of the arrangements required under the OFAC License is an important step in the efforts which all interested parties have been making to ensure that the contribution these fields make to UK energy supply is safeguarded and the value of the reserves assured. I wish to take this opportunity to thank all parties for their support.

Serica looks forward now to completing the transactions with BP, Total E&P and BHP and to working with suppliers and service companies to develop these reserves to their full potential.”

*BP and Total E&P are each retaining a 1% interest in the Bruce field