UPDATE 2-Iran sanctions may close BP gas field - EU exec

Published 10/26/2010, 09:31 AM
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* Sanctions will probably close BP's Rhum gas field - EU

* Shah Deniz gas venture unaffected - UK govt source

(Adds quotes, detail, background)

By Pete Harrison

BRUSSELS, Oct 26 (Reuters) - European sanctions over Iran's nuclear programme are likely to lead to the closure of a Scottish gas field jointly owned by the Islamic Republic and energy group BP, EU authorities said on Tuesday.

The sanctions are expected to become law on Wednesday, putting extra pressure on Tehran to return to negotiations over its uranium enrichment programme.

That could also lead to the closure of the Rhum gas field, 390 km (240 miles) to the northeast of Scotland, which BP has been developing with the Iranian Oil Company since 2003.

"The UK authorities have informed the Commission that the Iranian sanctions legislation is likely to cause the closure of this field," said a spokesman for EU foreign affairs chief Catherine Ashton.

"It shows that the UK authorities are ready to take the difficult decisions that are necessary to make the sanctions effective," the spokesman said.

In a separate development underlining Tehran's determination to push ahead with its nuclear programme, Iran began loading fuel into the core of its first nuclear power plant on Tuesday, one of the last steps to realising its stated goal of becoming a peaceful nuclear power, state television reported.

The EU sanctions, launched in July, block oil and gas investment in Iran and curtail Tehran's refining and natural gas capability.

But they are unlikely to have an impact on another BP joint venture with an Iranian company, the Shah Deniz gas field in Azerbaijan, said a British government source.

Britain's foreign office said it was up to individual companies to make sure they comply with the sanctions, which were finalised by EU foreign ministers in Luxembourg on Monday.

"That is the European Union using its collective weight in the world, absolutely in the right way, working with the United States and sending a clear message to Iran that it is important to negotiate on its nuclear programme," British Foreign Secretary William Hague said at that meeting.

A spokesman for BP said the company was waiting to see the details of the legislation when it is published this week. "We will ensure that Rhum complies with the regulations," he added.

Rhum produced up to 6 million cubic metres of gas a day in the first six months of 2010, according to government figures, or about 1 percent of Britain's peak gas demand forecast for this winter.

"We do not anticipate that the sanctions will have any significant impact on UK energy supplies or the UK energy market," said a UK foreign office spokeswoman. (Additional reporting by Daniel Fineren, Estelle Shirbon and Tom Bergin, Editing by Erica Billingham and Louise Heavens)

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