Fridman: L1, BASF oil deal not affected by sanctions pressure

LetterOne chairman Mikhail Fridman does not expect recent U.S. sanctions against Russian oligarchs will hamper his company’s oil deal with BASF.

This is according to the Russian news agency Interfax which on Thursday cited Fridman as saying L1 and BASF still planned to consolidate oil assets “despite new spiral of sanctions pressure.”

Russian billionaire Fridman’s LetterOne and Germany’s BASF in December 2017 signed a letter of intent to merge their oil and gas businesses into a joint venture named Wintershall DEA.

Lord Browne, former BP CEO, and currently the Executive Chairman of L1 Energy and Chairman of the Supervisory Board of DEA said the deal would make Wintershall DEA will be one of Europe’s largest independent E&P Companies.

Closing could be expected in the second half of 2018.

The oil and gas business of BASF is bundled in the Wintershall Group consisting of Wintershall Holding GmbH and its subsidiaries, including the gas transportation business. The oil and gas business of LetterOne comprises DEA Deutsche Erdöl AG and its subsidiaries.

As for the sanctions, the U.S. Treasury Department last Friday designated Russian oligarchs, officials, and entities in response to what it described “Worldwide Malign Activity.”

“The Russian government operates for the disproportionate benefit of oligarchs and government elites,” said Treasury Secretary Steven T. Mnuchin.

Mnuchin said: “The Russian government engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities. Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.”

Russian foreign ministry issued a counter-statement saying that the American democracy “is obviously in decline.”

The ministry said: “The US simply hopes to maintain its global hegemony by all means, in particular, by exerting pressure on countries that pursue independent policies and express opinions that are at odds with those of Washington’s NATO allies. As we have noted repeatedly, no pressure will divert Russia from its course. It merely reveals the inability of the US to achieve its goals and helps to rally Russian society.

“Needless to say, this latest anti-Russian move will not go unanswered. However, above all we wish to advise Washington to disabuse itself of the illusion that it is possible to speak to us in the language of sanctions,” the ministry said.

Among the notable oligarchs designated in the U.S. Treasury list are energy industry names such as Oleg Deripaska, Suleiman Kerimov, and Kirill Shamalov.

Gazprom’s head Alexey Miller is also on the list but as a Designated Russian Government Official.

Treasury said that all assets subject to U.S. jurisdiction of the designated individuals and entities, and of any other entities blocked by operation of law as a result of their ownership by a sanctioned party, are frozen, and U.S. persons are generally prohibited from dealings with them.

Additionally, non-U.S. persons could face sanctions for knowingly facilitating significant transactions for or on behalf of the individuals or entities blocked today, the U.S. Treasury said on Friday, April 6.

LetterOne’s Mikhail Fridman is not on this list.

Offshore Energy Today Staff