Russian given seven day deadline over North Sea assets

Russia given seven day deadline
Russia given seven day deadline

Energy Secretary Ed Davey has given Russian oligarch Mikhail Fridman seven days to explain why he should be allowed to retain ownership of newly acquired oil and gas fields in the North Sea, or face being forced to sell them.

Upping the ante in a standoff that could deter other Russians from investing in Britain, Mr Davey wrote to Mr Fridman saying he was considering forcing him to sell North Sea assets just acquired from German utility RWE.

RWE finalised the sale of oil and gas production unit RWE Dea to Mr Fridman’s investment vehicle, LetterOne, earlier this week, ending months of uncertainty over whether the £3.7billion deal would go ahead.

The deal included operated stakes in the Breagh, Cavendish, Clipper South, Topaz and Windermere North Sea gas fields, and also interests in the Anglia, Devenick, Kepler, Markham, Mimas, Minke, Orca, Saturn, Tethys and Victor fields.

But the UK Government has said it is concerned that production from the fields could be halted if the west imposes more sanctions on Russia over Ukraine, and it wants them sold to a third party.

Yesterday, the Department of Energy and Climate Change said: “Ed Davey has given them seven days to explain why the secretary of state should not now proceed to issue notices under the licences to require further changes of control.

“Protecting these assets is the secretary of state’s priority.”

Government sources insist Westminster will not drop its opposition to Mr Fridman’s purchase of the North Sea assets.

Two months before a general-election, the prospect of a Russian billionaire buying UK energy assets is politically unpalatable, given the ongoing crisis in Ukraine.