It is pertinent to note that the recent Harbour-Wintershall deal was also cleared within the same act…reports Asian Lite News
Prime Minister Keir Starmer’s government faced major backlash after a company, backed by two sanctioned Russian oligarchs was allowed to be part of the country’s largest North Sea oil producer. The company in question is LetterOne, which is part-owned by oligarchs Mikhail Fridman and Petr Aven.
According to The Guardian, the investment company was allowed to acquire almost 15% of Aberdeen-based Harbour Energy. Following the approval, the critics argued that a company partly owned by sanctioned Russians should have no place in owning critical national assets.
LetterOne received shares in Harbour Energy after the North Sea company completed an £8.5bn deal to buy the German company Wintershall which already counted LetterOne as one of the owners. It is pertinent to note that the company itself is not sanctioned by the UK authorities.
The company is chaired by an ex-Labour government minister
Interestingly, LetterOne is chaired by Mervyn Davies, a former banker and ex-Labour government minister, who under the terms of the acquisition will receive a share of Harbour’s profits paid as dividends. While both Fridman and Aven’s stakes in the company are frozen, the two Russians are still major shareholders.
All assets of both the Russian oligarchs were frozen when the UK and the EU imposed sanctions after the Russian invasion of Ukraine in early 2022. At that time, Davies made it clear that the pair would no longer have any involvement or influence over the business or its investment. This even included voting rights related to Harbour Energy.
Following the sanctions in 2022, the UK government used the National Security and Investment Act to order LetterOne to sell its stake in regional broadband provider Upp. The Conservative government at that time stated that the investment company’s ownership of the expanding full-fibre broadband networks was a national security risk.
It is pertinent to note that the recent Harbour-Wintershall deal was also cleared within the same act. Hence, the government could order the company to sell its stake in case of any changes to the deal that would give LetterOne a greater share of the company or a seat on the board.
Meanwhile, the Russian oligarchs are also expected to be removed from the sanctions imposed by the European Union, after they successfully challenged the sanctions at the regional body’s court this year. However, they will continue to remain on the sanctions list of the UK, where the two men resided before the war.
Alicia Kearns MP, the shadow minister for foreign affairs called the Labour government’s decision to approve the deal as “astounding and appalling”. She urged the government to reverse the decision and explain how the “consent was given in the first place”.
“For Labour to consent to oligarchical ownership of such a key national asset is beyond comprehension – energy security is a serious national security issue,” Kearns said. “It is particularly insulting this week following the devastation in Ukraine from Russian strikes on civilians, including schoolchildren and hospital patients,” she furthered.
Louis Wilson, the head of fossil fuel investigations at Global Witness, reiterated that the Russian oligarchs should not have any place in the UK’s energy industry, The Guardian reported.
“A company part-owned by sanctioned Russian oligarchs, which the Tories considered too much of a security risk to own a few thousand UK broadband connections, has been given a big chunk of the UK’s biggest oil producer. Oligarchs should have no place in the UK’s energy industry,” Wilson said.
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