UK government threatens to revoke oligarchs' North sea oil licences
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Version 0 of 1. North sea oil licences acquired by a group of controversial Russian oligarchs are to be revoked by the British government unless the fields are immediately sold. The LetterOne Group, which was founded by former TNK-BP directors Mikhail Fridman and German Khan, purchased the 12 fields from RWE’s oil and gas unit DEA last month. But the Department of Energy & Climate Change raised concerns that the new ownership could endanger the UK’s own oil and gas supplies should tougher sanctions be imposed against the Kremlin in future. In its latest move, the DECC said on Monday: “The secretary of state Ed Davey has notified DEA UK and LetterOne that he 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 government department added that DEA UK and LetterOne now have three months to “effect a further change of control”, although that timeframe could be extended to six months. LetterOne declined to comment on the announcement. The government is worried about a potential repetition of what happened when sanctions were imposed on Iran, which led in 2010 to the temporary shutdown of the North sea’s Rhum field, co-owned by BP and the state-owned National Iranian Oil Company. On the announcement of the deal in February, Davey said he was “minded” to require that the DEA offshore fields, which provide as much as 5% of the UK’s gas output, be passed on to a suitable third party. His statement provoked a furious reaction from the oligarchs, who insist they have no links to the Kremlin and are being unfairly treated. The Russians, who have also brought in former BP boss John Browne to head up their L1 Energy subsidiary, have previously threatened to sue the energy department, but have also been looking at sale options. The spat is the latest chapter in the colourful career of Fridman, who has built a fortune of around £10bn while acquiring a reputation as a businessman to be feared. He was part of a quartet of Russian billionaires who went into business with BP in the highly profitable, though politically fraught, TNK-BP joint venture, which is perhaps best remembered for the episode that saw its then boss – current BP chief executive Bob Dudley – fleeing Moscow in 2008, complaining of a sustained campaign of harassment that appeared to be instigated by his Russian business partners. Meanwhile, Lord Browne’s memoir, Beyond Business, describes Fridman as second in command in the Russian state and a tough negotiator: “He would give you the feeling that he would rather forfeit everything than give up on a single crucial point,” he wrote. |