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Russian Billionaire Turns To Norway Oil And Gas After UK Snub

LetterOne, the investment vehicle led by Russian billionaire Mikhail Fridman, is in taks to buy assets off the coast of Norway for $1bn

LetterOne, the investment vehicle led by Russian billionaire Mikhail Fridman, is in talks to buy stakes in Norwegian North Sea oil and gas assets owned by Eon, according to reports.

The $1bn deal comes just months after LetterOne was ordered by the UK government to sell British petroleum licences.

In a move to offset that sale, the company is eyeing energy purchases in northern Europe, North America and Mexico.

An agreement for Eon's assets could be made within days, the Financial Times claimed.

Eon, based in Germany, owns considerable stakes in several large fields off the Norweigan coast. It holds 28.1pc of the Skarv field, run by BP, and 30pc of the Njord and 17.5pc of Hyme fields, both owned by Statoil.

It comes after the UK government ordered LetterOne to sell North Sea petroleum licences amid concerns over the UK’s energy security.

The assets comprise of 11 oil and gas fields, including a 70pc stake in the Breagh field, which produces 3pc of Britain's annual gas output.

LetterOne, whose chairman is former BP veteran Lord Browne, acquired the licences earlier this year as part of a €5bn (£3.6bn) deal to buy RWE Dea.

Then Energy Secretary Ed Davey informed the group in April 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".

LetterOne was given until October 20 to sell off the licences. However, according to Reuters, LetterOne asked the UK government to delay the deadline after a first round of offers disappointed.

The offers, which were submitted in July, fell far short of LetterOne's target price of up to $1.2bn, with the highest offers coming in at around $750m, Reuters claimed.

The UK government is understood to be concerned about the possible impact on North Sea oil production that could arise from a potential tightening of economic sanctions against Russia.

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The Telegraph
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