Mikhail Fridman is threatening to sue the British government, after the Department of Energy blocked his purchase of 12 oil and gas fields in the North Sea because of Western sanctions over Ukraine, the FT reports.
Until a few months ago, Fridman had focused on strengthening his position in Russia’s domestic energy industry, but in August last year he bought RWE Dea, the oil and gas division of German utility giant RWE. According to Bloomberg, Fridman’s investment group, LetterOne, spent £3.7 billion (€5.1 billion) to buy RWE Dea, which include several North Sea fields among its assets.
To complete the purchase, Fridman and his business partner German Khan founded a new energy company, L1 Energy, and planned to have it chaired by Lord Browne, the former CEO of BP and a top figure in the British energy industry.
The German government had given the OK to the purchase of RWE Dea, but the British Department of Energy blocked the sale. Fridman’s name is on the black list of Russian oligarchs hurt by economic sanctions over the conflict in Ukraine.
In a statement published on February 28, Secretary of State for Energy Ed Davey expressed his concerns about the effect that further sanctions could have on LetterOne, L1 Energy parent company.
In the letter, Davey wrote that “if the proposed acquisition were to proceed in its current form, he [Davey] would be minded to require the companies to arrange for a further sale to a suitable third party.”
Despite British opposition, LetterOne said it is committed to the acquisition anyway, and would possibly try to use a Dutch company to overcome British sanctions according to the New York Times.
Fridman is planning to invest almost £300 million ($US450 million) in the North Sea, and was confident the partnership with Lord Browne would play in his favour. The former BP chief, who said he would give up his partnership at Riverstone Holdings to chair L1 Energy, described Fridman as “one of the shrewdest and most focused businesspeople that I know.”
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