Russia's L1 fund set to expand oil extraction off Norway

By bne IntelliNews January 20, 2016

The E.ON E&P Norge oil company recently acquired by DEA Deutsche Erdoel, controlled by billionaire Mikhail Fridman's LetterOne (L1) fund, has been invited to develope five oilfields on the continental Norwegian shelf, Vedomosti reported on January 20, citing the country's oil agencies.

The company could receive from 15% to 30% shares in the projects, which will be operated by Norwegian subsidiaries of BP, ConocoPhillips, Shell, and PGNiG.

A total of 36 companies (of 43 that applied) were invited develop 56 new fields in the North, Norwegian, and Barents seas. Of these, 24 were granted to Norwegian oil major Statoil.

Russia's Lukoil and Rosneft did not participate in the round of development license distribution, according to TASS news agency.

The issue of new extraction licenses to DEA assets underscores the intention of Fridman's L1 to become a global oil and gas group, focusing at first on Europe and North Africa, where it has existing interests.

L1 was set up by Fridman and his partners in Russia's Alfa Group following Alfa's exit from the Russian-British joint venture TNK BP and holding a $14bn share of the $28bn the group earned from selling its stake to Russia's state-owned Rosneft.

Fridman has since been looking for oil and gas assets to buy, as long as they are outside Russia. In October 2011 L1 was announced to acquire Norwegian oil and gas extraction assets from Germany's energy major E.On for $1.6bn.

E.On is to sell its Norwegian oil and gas fields to DEA, which was acquired by L1 from German's RWE in March for €5bn.

The deal, will more than double DEA-controlled production in Norway to 75,000 barrels a day, the Financial Times estimated earlier.

Related Articles

Montenegro to speed up re-nationalisation of power firm EPCG

Montenegro’s government has decided to speed up the acquisition of Italian A2A's stake in the power firm EPCG, paying €68.9mn for a ... more

Croatia reportedly receives just one bid to lease capacity at planned LNG terminal

LNG Hrvatska has reportedly received just one binding offer to lease capacity at the planned planned liquefied natural gas (LNG) terminal on the Croatian island of Krk, unnamed sources ... more

Finland gives final nod to construction of Nord Stream II

Finland has issued a second and final permit for the construction of the controversial Nord Stream II pipeline that is to pump gas from Russia directly to Germany via a Baltic Sea route, the Regional ... more