Russian oil-igarch hires ex-BP boss Browne to lead controversial N. Sea acquisition

DEA_Logo1Russian oil billionaire Mikahil Fridman has hired ex-BP boss Lord John Browne as executive chairman of his LetterOne energy division.

However, the deal may fall foul of international sanctions against Russia over its dispute with Ukraine, with UK Energy Minister Ed Davey raising concerns over safety.

LetterOne is the Luxemburg-registered holding company which last week acquired 12 North Sea oil and gas fields in its £3.7 billion takeover of RWE DEA.

Fridman made his money from investment and operational track record in the energy sector – including the sale of the integrated oil and gas company TNK-BP.

Browne – who was Chief Executive of BP from 1995 until 2007 – said: “In DEA, we have acquired a company with long history of technical and managerial excellence, a track record of imaginative thinking, an international outlook, and great potential”.

DEA is a Hamburg-based oil and gas exploration company, employing more than 1,400 people worldwide, and has equity stakes in production facilities and licences in the UK, Germany, Ireland, Norway and Poland, among others.

Despite the notable drop in the prices of crude oil and natural gas the company plans to investment in new exploration and drilling activities to lay the foundations for further growth. Worldwide, oil and gas will remain the most important energy sources in the next decades.

Davey raised concerns with RWE and LetterOne about the effect that possible future sanctions imposed on LetterOne may have on the continued operation of the 12 North Sea fields and the ‘serious health and safety and environmental risks that may result’.

If not satisfied with the response from LetterOne, Davey may try to force Fridman to sell on LetterOne’s North Sea assets to a third party, which resulted in a legal sabre-rattling reply from the Russian.

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