British Government Could Force Sale of LetterOne’s 12 Fields in North Sea

The UK Government has given seven days to Mikhail Fridman’s LetterOne to provide further explanations on the company’s plan for the recently acquired fields in the North Sea.

The Secretary of State for Energy and Climate Change, Ed Davey, sent a letter to the company led by the Russian billionaire, hypothesising that Fridman could be soon forced to sell the assets. 

‘In his letter, Ed Davey has said he would be willing to consider further representations from LetterOne. 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’ reads the note released on Thursday.

London is particularly worried that the 12 oil and gas field sold by RWE Dea to LetterOne could be negatively impacted by eventual new sanctions on Russia. In a press release published on Saturday, the British government voiced its concern about the ‘continued and safe production’ of British hydrocarbon resources. 

RWE Dea and LetterOne sent proposals to mitigate the risk, but Davey rejected the plans drafter by the two companies.

‘After careful consideration the Secretary of State has decided that the proposal does not adequately and surely alleviate those concerns and has notified the companies involved that if the proposed acquisition were to proceed in its current form, he would be minded to require the companies to arrange for a further sale to a suitable third party’ the British government wrote last week. 

On Monday, RWE announced that the parts completed the sale, agreeing on agreed enterprise value of €5.1 billion.