Two sanctioned Russian oligarchs have become part-owners of North Sea operator Harbour Energy.
It comes after the oil producer completed a £8.53 billion deal to buy German firm Wintershall DEA.
LetterOne, the investment company part-owned by oligarchs Mikhail Fridman and Petr Aven, was a part-owner of Wintershall.
It now owns nearly 15% of Harbour Energy.
However, LetterOne itself is not sanctioned, and the two Russians have no contact with the firm and don’t receive any share of its profits.
Harbour Energy to grow international portfolio
Harbour Energy, the UK’s largest North Sea oil and gas producer, announced plans for the takeover Wintershall in December last year.
The move came as part of Harbour’s strategy to pivot away from the North Sea to build up its international portfolio following the introduction of the windfall tax.
The company blamed the windfall tax for its decision to cut 350 onshore jobs in the UK last year, as it took a £381m hit to its earnings in 2023.
It has bought most of the oil and gas production assets of Wintershall DEA, from the chemicals giant BASF.
No voting rights for LetterOne
Some of Wintershall’s Russia-linked assets, including a joint venture with Gazprom, are not part of the deal and remain with BASF.
Under the terms of the deal, LetterOne will have no voting rights in Harbour Energy, but it will receive a share of Harbour’s profits paid as dividends.
LetterOne’s shares could potentially convert into voting shares if the two Russians cease to be sanctioned.
It owns a portfolio worth £13.8bn across the globe and includes the health food retailer Holland and Barrett.
‘Investments in businesses that matter’
Mr Fridman and Mr Aven were sanctioned in March 2022 shortly after Russia invaded Ukraine.
Together they own just under 50% of the group. Most of the rest is owned by another Russian, Andrei Kosogov, who is not sanctioned.
Following the deal, Wintershall owner BASF will hold a 46.5% stake in Harbour subject to a six-month lock-up.
Meanwhile, Harbour’s legacy shareholders will retain the remaining 53.5% of the company’s shares.
A LetterOne spokesperson said: “LetterOne is committed to making long-term investments in businesses that matter.
“We are proud to be part of a bigger, stronger UK energy business that will bolster energy security, increase investment and create jobs while helping deliver the nation’s ambitious energy transition goals.”
Harbour Energy declined to comment.
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