Serica Energy, BP Receive License, Assurance From OFAC

By Oliver Griffin

Shares in Serica Energy PLC (SQZ.LN) soared Tuesday after it said that it and BP PLC (BP.LN) have received a conditional license and assurance from the U.S. Office of Foreign Assets Control relating to the Rhum field in the North Sea.

The oil-and-gas company bought assets from BP, including a 50% stake in the Rhum field, last November for up to 52 million pounds ($68 million) as part of a reverse takeover. However, the co-owner of the Rhum field is Iranian Oil Company (U.K.) Ltd, a subsidiary of the Iranian state oil company, which could have opened up the possibility of companies working on the field being hit by U.S. sanctions.

With the conditional license and assurance from OFAC--the body that controls sanctions--the company's wholly owned subsidiary, Serica Energy (UK) Ltd., and BP will be allowed to receive goods, services and support from certain U.S. and U.S.-owned entities.

OFAC has also provided an assurance that non-U.S. entities providing goods, services and support involving the Rhum field won't be hit by secondary sanctions, Serica Energy said.

Serica Energy said the agreement with OFAC is conditional on arrangements being put in place by Nov. 4 so that all of the benefits from Iranian Oil Company's interest in the Rhum field will be held in escrow while U.S. sanctions apply.

The arrangements, which are at an advanced stage, ensure that neither the Iranian-owned company nor any of its direct or indirect parent companies will derive economic benefit from the Rhum field during that period, Serica Energy said.

Serica Energy shares at 0723 GMT were up 30% at 100 pence.

Write to Oliver Griffin at [e-mail]; @OliGGriffin

(END) Dow Jones Newswires

October 09, 2018 03:41 ET (07:41 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.