London welcomes LetterOne divestment from North Sea

LONDON, Oct. 22 (UPI) -- The sale of North Sea oil and gas interests by a Russian oil tycoon to a Swiss company will boost the energy sector's potential, the British government said.

The British government in April called on LetterOne, an investment company controlled by Russian oil magnate Mikhail Fridman, to dispose of North Sea oil and gas assets it acquired from German energy company RWE.

The British Department of Energy and Climate Change said LetterOne was finalizing the sales to INEOS in a transaction directed by the government to ensure continued and safe production in the North Sea.

"The oil and gas industry is an essential part of our plan to provide secure, affordable and reliable energy for hardworking families and businesses," the DECC said in a statement. "We have a responsibility to ensure its continued and safe production. INEOS is a well-funded, cost-conscious player who will work with us to maximize the potential of the North Sea."

INEOS said that, in terms of natural gas alone, its acquired assets in the North Sea could account for as much as 8 percent of the annual British gas production.

Fridman and fellow investor German Khan established LetterOne after they sold their shares in TNK-BP in 2013 for $14 billion. That same year, Russian oil company Rosneft agreed to acquire energy giant TNK-BP in deals with British energy company BP and AAR, a group representing the interests of four Russian billionaires in the consortium, including Fridman.

Bob Dudley, now the chief executive at BP, left TNK-BP in 2008 during disagreements over the company's direction. TNK-BP later expressed frustration over a failed 2011 proposal with Rosneft to work in the arctic, accusing BP of violating terms of a shareholder agreement.