Two Russian oligarchs behind TNK-BP have emerged as front runners to buy North Sea assets owned by RWE Dea.
Mikhail Fridman and German Khan, who sold their shares in BP’s former Russian venture in a £33billion deal last year, are thought to have put in the highest bid for the assets, which include a major stake in the troubled Breagh gas field.
Germany’s RWE announced plans to sell its oil and gas exploration business last year in an effort to slash debts and staunch losses. A deal is expected to be concluded within the next two weeks.
Last week the German power giant revealed it had made a net loss of £2.3billion last year, the first since 1949, and had debts of £25billion.
Dea took a 70% stake in Breagh in 2009, which it operates with Calgary and Aberdeen firm Sterling Resources.
The German-owned explorer and producer also operates the Cavendish field with Dana Petroleum and is a joint venture partner in the Devenick field with BP.
Breagh, considered to be one of the largest UK North Sea gas finds, was discovered in 1997 but did not begin moving into development until Sterling was awarded the license in 2002.
The partners hailed the start of production in October. But the project on the UK Southern North Sea had been hit by long delays and spiralling cost overruns, which forced Sterling into a series of refinancing deals. Its chief executive Mike Azancot left the firm and was replaced by chairman Jacob Ulrich last month.
Mr Fridman and Mr Khan set up Mayfair-based investment firm L1 Energy after the sale of TNK-BP to state-controlled Rosneft. The duo were founders of the Alpha Group, one of Russia’s largest private investment groups in the late 1980s.
The Ukranian billionaires are thought to have outbid rivals for the Dea assets, including American private equity firm KKR and Kuwait national oil company Kufpec. It is thought Germany’s Wintershall is still in the running having submitted increased offers. Mr Fridman is thought to be Russia’s second richest person.