Germany green lights sale of RWE Dea to Russian fund

22nd August 2014, Comments 0 comments

The German government said Friday it has given the go-ahead to power giant RWE's sale of its Dea oil and gas unit to a Russian-controlled investment fund.

"We've examined the case intensively and have raised no objection," a spokeswoman for the economy ministry told a regular government news briefing.

"We don't expect it will affect the security of supply in Germany," she added.

The ministry launched a probe in mid-June into RWE's planned 5.1-billion-euro ($6.8-billion) sale of Dea -- which specialises in oil and gas exploration and production -- to a Luxembourg-based fund called LetterOne, which is controlled by Russia's Alfa Group.

Alfa Group belongs to billionaire entrepreneur Mikhail Fridman.

The transaction is a key part of RWE's strategy for reducing debt and freeing up investment for the transition away from fossil fuels towards renewable energy currently underway in Europe.

The deal's announcement came against the backdrop of the crisis in east Ukraine and Europe's threat of tougher sanctions against Russia.

It drew strong criticism from German lawmakers, with the opposition Greens calling on the government to stop the deal.

It also drove a debate about Germany's dependence on Russian fossil fuels.

The fact that LetterOne is based in Luxembourg played a role in the government's decision, the ministry spokeswoman said.

"We've cleared one of the hurdles to a sale. We'll continue with the process as planned," a spokeswoman for RWE told AFP, without providing further details.

Before the deal can be signed and sealed, the governments of the 14 countries where Dea holds exploration rights -- including Germany, Britain, Norway, Egypt and Libya -- must give their approval.


© 2014 AFP

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