E.ON leaves upstream North Sea

DUSSELDORF, Germany, Oct. 14 (UPI) -- Germany energy company E.ON sold its entire North Sea exploration division to a company controlled by Russian billionaire Mikhail Fridman.

Exploration and production company DEA Deutsche Erdoel, a subsidiary of Fridman's LetterOne, takes a 100 percent stake in the North Sea subsidiary, E.ON E&P Norge, in a deal valued at $1.6 billion.

"The successful sale of our E&P business in Norway is a landmark transaction in the sector; as an important step in our overall financial framework it provides flexibility to implement our strategy and reposition the group," E.ON Chief Financial Officer Michael Sen said in a statement.

Assets in the deal include 43 licenses in the Norwegian waters of the North Sea. During the weekend, Swiss chemical company Ineos made its debut in the British waters of the North Sea with gas asset purchases from LetterOne.

E.ON has moved assets in a bid to restructure its business focus in a weakened oil market. Two North Sea wind farms -- Amrumbank West and Humber Gateway -- are providing electricity to inland markets. In September, it started construction on the 20-megawatt Maricopa West solar project in Southern California. With 89,000 panels, the company said it's the second such large-scale project built by E.ON in the western U.S. state.

E.ON in August posted a net income for the first half of the year of $1.36 billion, 21 percent lower year-on-year. The company blamed low crude oil prices for the loss.

There was no statement on the acquisition from LetterOne or its subsidiary. E.ON placed its North Sea exploration and production operations under strategic review in November.