MOSCOW (MRC) -- Ministers are to examine a deal that hands Russia’s Gazprom interests in the UK North Sea, amid calls for Britain to send “a clear message” to Vladimir Putin over Ukraine, said Financial Times.
The state-backed energy group’s purchase of a 50 per cent stake in BASF subsidiary Wintershall’s North Sea business, which includes the Wingate gas platform and several offshore UK exploration licences, will be an early test for energy secretary Amber Rudd.
Her Liberal Democrat predecessor Ed Davey, backed by Downing Street, forced Russian billionaire Mikhail Fridman to put a dozen gasfields acquired by his USD10bn fund L1 Energy up for sale. Gazprom, which will take the North Sea stake as part of a revived multibillion-euro asset swap with BASF, the German chemicals group, has yet to seek a "letter of comfort" from the Department of Energy and Climate Change.
The company is not under any obligation to seek such an assurance but could find itself wrongfooted by any opposition if were ministers unhappy.
"We will examine the detail of this deal closely to consider its implications, as we do for any deal involving assets within British waters," a department official said.
Sir Gerald Howarth, who chairs the all-party Ukraine group, said the response to the Gazprom deal should be "consistent" with how LetterOne, Mr Fridman’s investment vehicle, was treated.
The Gazprom deal may, in theory, raise similar concerns to those voiced by senior UK ministers, in relation to L1, about the potential vulnerability of a Russian takeover of North Sea assets as a fall in oil and gas prices encourages producers to offload their operations.
Their concerns centre on the risk of a repeat of what happened when sanctions were imposed on Iran, which led in 2010 to the shutdown of the North Sea’s Rhum field, co-owned by BP and the National Iranian Oil Company. Output only restarted in October.
Ministers have argued that there is unlikely to be any swift reversal of sanctions on Russian companies and individuals and, to the contrary, western economic penalties are more likely to be increased.
The deal with BASF gives Gazprom full control of a jointly operated European gas trading and storage business, the main strategic rationale. But it also gives the Russian group a significant interest in oil and gas production in western Europe. Wintershall operates 22 platforms in the North Sea, the vast majority of which are in waters off the Netherlands.
A person familiar with Gazprom’s thinking said the speed at which the BASF deal had been done meant it had not applied for the letter of comfort. The asset swap has been approved by the European Commission.
As MRC informed earlier, Alexander Medvedev, Deputy Chief Executive Officer of Russia's top gas producer Gazprom, said on Monday that its asset swap deal with Germany's BASF had been revived thanks to the Nord Stream-2 pipeline project. Gazprom and BASF said last week they had agreed to revive a deal that collapsed in late 2014 under which Gazprom would get greater access to gas trading and storage in Germany.
BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
Gazprom is the largest extractor of natural gas and one of the largest companies in the world.
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