RWE\u2019s \u20ac5bn deal to sell RWE Dea, the German group\u2019s oil and gas arm, has been held up\u00a0by opposition from the UK government following US and EU sanctions on Russia\u2019s financial services, defence and energy sectors.<\/p>\n
The Netherlands foundation will assume full control of Dea\u2019s North Sea business if sanctions on Luxembourg-based L1 or its owner are imposed. Sanctions would also oblige RWE to buy back the UK business if the sanctions were imposed within one year of the deal being completed, which is due to happen in March.<\/p>\n
RWE\u2019s shares were up 4.5 per cent to\u00a0\u20ac23.51 in Frankfurt on Friday.<\/p>\n
L1 announced last March that it was buying Dea, which pumps oil and gas in the UK, Germany, Norway, Denmark and Egypt, for \u20ac5.1bn.<\/p>\n
Although the deal was approved by the German government, Britain\u2019s energy secretary Ed Davey blocked the transaction, in a sign of how private Russian companies with no connection to president Vladimir Putin were falling victim to deteriorating relations between Moscow and the west over Russia\u2019s intervention in Ukraine.<\/p>\n
RWE and L1 sought assurances from the UK that it would not seize control of RWE Dea\u2019s North Sea assets if Russian companies were targeted by additional sanctions.<\/p>\n
The deal will be carried out at almost the same price agreed last year, despite\u00a0the collapse\u00a0in the oil price. RWE and L1 said the value of RWE Dea had been adjusted from \u20ac5.1bn to \u20ac5bn to account for \u201cdevelopments relating to certain exploration and production licenses\u201d.<\/p>\n
The UK accounted for about one-fifth of Dea\u2019s natural gas production in 2013, but less than two per cent of the unit\u2019s crude oil production that year.<\/p>\n
Mr Fridman attracted some of the most high-profile names in the energy business to advise him on his oil investments, including former British Petroleum\u00a0chief executive Lord Browne.<\/p>\n
RWE\u2019s profits have been badly squeezed by Germany\u2019s shift to renewables, and the company has responded by cutting operating costs and capital expenditure, and putting RWE Dea up for sale.<\/p>\n
\n<\/div>\n","protected":false},"excerpt":{"rendered":" RWE has agreed to complete the sale of North Sea gasfields to a Russian billionaire \u2014 with the proviso that the German utility will buy back the UK assets in the event of sanctions against the oligarch. RWE\u2019s \u20ac5bn deal … Continue reading ![\"North](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/02\/North-Sea-Oil-300x197.jpg\")
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