A RUSSIAN oligarch's bid to acquire North Sea gas fields appears to have fallen victim to the chill in relations between the West and Moscow.
The UK has reportedly blocked billionaire businessman Mikhail Fridman's £4 billion deal to buy German oil and gas firm RWE Dea, which has interests off the coast of Scotland.
It follows the sanctions imposed by US and EU following his country's invasion of Crimea in March this year.
Dea operates in 14 countries, owns stakes in around 190 oil and gas licences or concessions in Europe, including the North Sea, the Middle East and North Africa.
Parent company RWE requires approval from local governments to complete the transaction.
Mr Fridman's Luxembourg-based investment fund LetterOne announced in March it was buying Dea. It was to be the first big deal for L1, which was set up by the Russian businessman and his partner German Khan last year to invest some of the £8.7bn proceeds from the sale of their stake in Russian oil producer TNK-BP to Rosneft.
While the German government cleared the deal in August, RWE said it was waiting for a "comfort letter" from the UK, to ensure there were no objections.
It is understood L1 and RWE wanted an assurance that, if further sanctions were imposed against Russian companies, the British government would not take control of the North Sea assets and sell them on.
The concerns arise out of the fate of BP's Rhum gasfield in the North Sea, partly owned by the Iranian government, which was shut down after sanctions were imposed against Tehran in 2010.
Sources state UK Energy Secretary Ed Davey was "not minded" to sign a letter of assurance in light of recent sanctions against Russia, raising concerns that the transaction has hit a snag.
While the overall deal is still expected to go through, it is likely UK assets - offshore gas fields in the North Sea - will be excluded.
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