Precise discuss the last decision from the UK to pressure Russian oil billionaire, Mikhail Fridman, into selling his North Sea gas fields.
For the first time ever Britain has used powers available to it to order a Russian billionaire to sell North Sea gas fields. Mikhail Fridman has been told he has six months to give up the licences or they will be revoked.
It is a strong move against one of the country’s most influential tycoons and it is a move that many Russian businessmen say shows they and their capital are no longer welcome in the West.
That Britain, a country which prides itself on being a champion of the free market, has done this indicates the strength of feeling against President Vladimir Putin’s actions in Ukraine. More than 6000 people have been killed in the fighting between pro-Russian separatists and government forces. Moscow has always denied being a key player in the conflict. But with 13 days to go before the election the Prime Minister appears unable to stomach a Russian owning Britain’s energy assets, particularly ones which are responsible for up to 5% of the country’s gas output.
When the LetterOne Group acquired 12 fields from RWE in March the UK Government immediately raised concerns about the impact of future sanctions against Russia. It wants to avoid a repetition of the 2010 scenario when sanctions imposed by the West against Iran led to the temporary shutdown of the Rhum field in the North Sea – which was co-owned by BP and the National Iranian Oil Company. The Secretary of State Ed Davey is prepared to revoke the petroleum licences if the oligarch does not comply. LetterOne has not responded to the announcement.
With the withdrawal of traditional oil giants from Britain’s North Sea the area is in real need of an injection of fresh investment. It is gradually becoming more costly for production companies to draw oil and gas form the mature basin. However sources say there is no reason to suspect LetterOne would find it difficult to get a buyer for the fields.
But it will be a large step down for a man with a reputation as someone who not to be trifled with. As The Guardian reports, “Lord Browne’s memoir, Beyond Business, described 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 point.”