Government blocks Russian oligarch and Lord Browne-run fund buying North Sea oil fields over sanctions worries

Lynsey Barber
Follow Lynsey
A North Sea oil and gas deal has been scuppered by the government (Source: Getty)

The government has blocked the sale of North Sea oil and gas fields to Russian oligarch Mikhail Fridman and his LetterOne fund run by former BP man Lord Browne due to worries over Russian sanctions.

Energy secretary Ed Davey warned it would not approve the sale of 12 oil and gas fields by the German energy firm RWE to LetterOne because of the possibility that future European sanctions against Russia would target Fridman.

Davey said he would be “minded to require the companies to arrange for a further sale to a suitable third party” if the deal for RWE’s Dea arm, which includes 12 North Sea fields, were to proceed.

If the deal were to proceed with the Fridman’s fund taking ownership of the gas and oil fields, they could potentially be shut down as a result of sanctions against the Russian billionaire.

The €5.1bn (£3.7bn) deal, which also includes assets in Norway, Germany and Denmark as well as licences in Algeria, Guyana and Turkmenistan, was expected to close imminently after gaining approval from several other governments.

An RWE spokesperson told the Wall Street Journal it still planned to close the deal at the beginning of March.

Proposals by LetterOne’s energy fund L1 Energy, run by former BP boss Lord Browne, to keep the British assets separate were not accepted by the government. “ After careful consideration the secretary of state has decided that the proposal does not adequately and surely alleviate those [sanctions] concerns,” said Davey.

Related articles