Russian oligarch aims to keep North Sea oil and gas assets

The future of some North Sea oil and gas assets is set to be decided in the next week.

Russian oligarch Mikhail Fridman has been give a one-week deadline to convince the UK government that he should be allowed to retain his newly acquired oil and gas assets in the North Sea. Ministers are concerned that production at the fields could stop should the US and European Union (EU) impose further sanctions on Russia.

Mr Fridman's investment vehicle LetterOne purchased the energy company DEA UK from German firm RWE on Monday (March 2nd). The deal was confirmed despite objections from the government and now ministers want the assets of the North Sea field to be sold to a third party.

Energy minister Ed Davey wrote to LetterOne on Wednesday stating: "Ed Davey has given them seven days to explain why the secretary of state should not now proceed to issue notices under the licences to require further changes of control. Protecting these assets is the secretary of state's priority."

Russia has been subject to economic sanctions imposed by the US and EU for the past year. It centres around the country's involvement in growing tensions in Ukraine where Russia has been accused of backing separatists in the eastern part of the nations.

Bleak future for North Sea oil and gas

Industry body Oil & Gas UK recently painted a bleak for the North Sea oil and gas sector. A recent report highlighted that the industry invested £5.3 billion more than it earned from sales in the past 12 months. Overall spend reached £14.8 billion which was much higher than expected with a number of high profile projects running over.

Operating costs continued to rise with an eight per cent increase from the previous year to £9.6 billion. Annual investment could also fall as low as £2.5 billion in the coming year.