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UK orders sale of Russian billionaire's North Sea fields

20 April 2015

The UK Government has ordered Russian billionaire Mikhail Fridman to sell his North Sea gas fields within six months, informing his investment vehicle LetterOne that its North Sea licences would all be revoked unless they were sold. This follows LetterOne's acquisition of the fields last month as part of a 5.1 billion euro takeover of RWE's DEA oil unit. 

Stock image
Stock image

Energy Minister Ed Davey "proposes to revoke DEA UK's North Sea petroleum licences unless LetterOne arranges for a further change of control of the DEA UK gas fields in the North Sea", the ministry said in a statement.

Industry observers say that after a showdown with President Vladimir Putin over Ukraine, the prospect of a Russian tycoon buying British energy assets is politically unpalatable, especially so close to the UK general election.

Reuters quoted a UK source close to the situation who said the government had no reason to doubt LetterOne would find a suitable buyer within the given timeframe.

Britain's North Sea is in serious need of fresh investment as traditional oil companies such as BP and Shell withdraw as output falls and costs of production rise.

Ukrainian-born Fridman, who made a fortune in Russia after the Soviet Union collapsed in 1991, has tried to allay UK worries by grouping the assets at the centre of the dispute in a Dutch foundation, a step he says would insulate them from any possible sanctions.

Fridman, 50, is ranked by Forbes as the world's 68th richest person with a fortune of $14.6 billion.

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