UK Blocks Sale of British Oil/Gas Fields to Russia-Owned Fund

UK Blocks Sale of British Oil/Gas Fields to Russia-Owned Fund UK Blocks Sale of British Oil/Gas Fields to Russia-Owned Fund

The UK Department of Energy and Climate Change has decided not to approve the sale of 12 British North Sea oil and gas fields from the German utility RWE Dea to the LetterOne privately-owned investment fund, fearing that it might become the target of EU anti-Russia sanctions.

"The department has been considering the proposed acquisition by LetterOne of twelve producing North Sea oil and gas fields currently owned by RWE Dea," UK Secretary of State for the Department of Energy and Climate Change Ed Davey said in a statement, Sputnik reported Sunday.

According to the statement, Davey has raised concerns with the two companies about the effect that possible future sanctions imposed on Luxemburg-based LetterOne, which is owned by Russian billionaire Mikhail Fidman, might have on the continued operation of the twelve oil and gas fields.

"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 statement said.

LetterOne and RWE reportedly intended to close the sale of the fields on Monday, with or without UK government approval. According to the daily, the deal has all other relevant approvals for assets in Norway, Germany and Denmark and licenses in countries including Algeria, Guyana and Turkmenistan.

RWE and LetterOne concluded the deal on the sale of the 12 British fields in March, 2014.

The European Union, the United States and their allies have been imposing sanctions against Russia's energy, banking and defense sectors, as well as certain individuals, since the spring of last year, over Russia's alleged involvement in the Ukrainian crisis.

The sanctions ban the export of products destined for deep water and arctic oil exploration and production, as well as shale oil projects in Russia.