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Britain orders sale of Russian billionaire Fridman's North Sea fields
[LONDON] Britain on Monday ordered Russian billionaire Mikhail Fridman to sell his newly acquired North Sea gas fields within six months, ratcheting up the pressure on one of Russia's most influential businessmen just two weeks before the May 7 national election.
Upping the ante in a standoff that some Russian businessmen say shows Russian capital is no longer welcome in the West, Britain's energy minister Ed Davey notified Fridman's LetterOne investment vehicle that its North Sea licences would be revoked unless their ownership changes.
The rare decision follows LetterOne's acquisition of the fields last month as part of a 5.1 billion euro takeover of RWE's DEA oil unit, a purchase that British Prime Minister David Cameron opposed.
Mr Davey "proposes to revoke DEA UK's North Sea petroleum licences unless LetterOne arranges for a further change of control of the DEA UK gas fields in the North Sea", the Energy Ministry said in a statement.
The ministry, which said the decision was made after assessing cross-government views, said Mr Davey had given LetterOne six months to sell the assets. LetterOne was not immediately available for comment.
After a showdown with President Vladimir Putin over Ukraine, the prospect of a Russian tycoon buying British energy assets is politically unpalatable, especially so close to the election.
Britain, which styles itself as a champion of free markets with one of the world's most open economies, rarely intervenes in such cases but in a sign of the gravity of the British concerns, the deal was discussed by Mr Cameron.
A source close to the situation told Reuters last month that Mr Cameron had opposed the purchase of the British fields.
The British stance reflects deep unease in London about Mr Putin's actions in Ukraine, where more than 6,000 people have been killed in fighting between government forces and pro-Russian separatists. Moscow denies backing the rebels.
Government sources previously told Reuters Britain's decision had been influenced by a case in 2010, when it had to shut down the North Sea Rhum gas field because of sanctions imposed on its Iranian co-owner.
The fields Mr Fridman is purchasing produce 3 to 5 per cent of Britain's gas output.
Britain's North Sea is in dire need of fresh investment as traditional large oil companies such as BP and Shell have started withdrawing from the mature basin that is getting more and more costly to find new oil and gas in.
Ukrainian-born Mr Fridman, who made a fortune in Russia after the Soviet Union collapsed in 1991, has tried to allay British worries by grouping the assets at the centre of the dispute in a Dutch foundation, a step he says would insulate them from any possible sanctions.
Mr Fridman, 50, is ranked by Forbes as the world's 68th richest person with a fortune of US$14.6 billion, while his business partner German Khan, 53, is ranked 133rd with US$9.5 billion.