NORTH Sea-focused Serica Energy has seen its shares surge five per cent after the firm negotiated a geopolitical challenge that could have had a big impact on its profits.

Serica has faced complications after acquiring a stake in the huge Rhum gas field off Shetland from BP in 2017.

As the national oil company of Iran has a 50% stake in Rhum, there were fears the field could be ensnared in the sanctions Donald Trump decided to impose on the country.

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Serica spent weeks negotiating an exemption in a task that chief executive Mitch Flegg has said involved “to-ing and fro-ing to Washington” and weeks with lawyers.

The exemption was due to run out on October 31.

However, Serica confirmed yesterday that it had received a renewed licence and secondary sanctions assurance from the US authorities.

This will enable operations and production from the Rhum field to continue unaffected.

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The licence has been granted for an extended period up to February 28 in 2021, compared to the standard 12 months.

Welcoming the award, Mr Flegg underlined the wider significance of the concession made by the US Office of Foreign Assets Control.

“In production terms during Q2 2019 Rhum was the third largest gas field on the United Kingdom Continental Shelf,” he noted.

“The receipt of the renewed and extended License and assurance is an excellent outcome which protects this valuable British asset.”

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Mr Flegg said Serica appreciated the support of the UK oil and gas regulator and government departments.

Shares in AIM market-listed Serica Energy closed up 10p at 143.4p.

The company’s share of production from Rhum averaged 14,200 barrels oil equivalent daily in the first half.