German oil firms Wintershall and Dea will be merged after their parent companies struck an agreement.
Petrochemicals firm BASF and financial holding company LetterOne said the combination would pave the way for the creation of one of Europe’s biggest exploration and production companies.
BASF will hold 67% of the shares in Wintershall Dea, with LetterOne taking 33%.
The deal is expected to go through in the second half of 2018.
BASF owns Wintershall, while LetterOne controls Dea.
Russian billionaire Mikhail Fridman is LetterOne’s co-founder and principle shareholder.
Mr Fridman confirmed his status as one of Russia’s richest men after he sold a stake in oil firm TNK-BP to state-backed Rosneft in 2013. It is thought he and his business partners made more than £8.4billion on the deal. They used the proceeds to found Luxembourg-based LetterOne, which had £6billion to spend on oil and gas assets.
In 2014, they acquired Dea, the oil and gas production arm of German utility RWE. But the then energy secretary, Ed Davey, insisted UK assets covered by the deal must be sold due to concerns that production could be halted if the West chose to target Mr Fridman with sanctions.
North Sea newcomer Ineos then snapped up RWE’s former UK North Sea business.
Wintershall held six licenses in the UK North Sea as of March, and a 49.5% stake in the Wingate gas production platform.