Germany’s RWE Aktiengesellschaft has conditionally agreed to sell its exploration and production firm subsidiary RWE Dea AG to Russian-backed LetterOne Group for about Euro 5.1 billion (US$7 billion).
LetterOne was founded last year as an investment vehicle, run by the founders of Russia’s Alfa Group, including chairman Mikhail Fridman, and former TNK-BP CEO Jonathan Muir, based on the proceeds of the sale of TNK-BP, a controlling stake in Altimo, and other investments, as well as certain private equity and hedge funds.
RWE Dea AG is an international exploration and production company for oil and gas with headquarters in Hamburg. The company has concessions, facilities, and offices in 14 countries, including production facilities and concessions in Germany, the UK, Norway, Denmark, and Egypt.
RWE Dea has production facilities under construction in Algeria and Libya. RWE Dea currently has stakes in about 190 licenses or concessions – almost half of them as operator - in Ireland, Mauritania, Poland, Suriname, Trinidad & Tobago and Turkmenistan.
In 2012, RWE Dea increased its reserves and resources (discovered) by 2MM cu m of oil equivalents to almost 239MM cu m of oil equivalents.
Last year, RWE Dea, as operator, started up the Breagh gas field in the North Sea (Pictured - the Breagh platform). It was the largest field development project under its operatorship in the United Kingdom and one of the largest natural gas fields under development in the southern UK North Sea.
More recently, the firm said the development of its natural gas project Disouq in the Egyptian Nile Delta was progressing successfully following another positive appraisal of the North West Khilala (NWK) gas field with the development well NW Khilala-1- 4.
The Disouq project, operated by RWE Dea, encompasses the development of seven gas fields in the Nile Delta and NWK is the first field brought into production, last September. NWK-1-4 is the fourth well to be drilled in the NWK structure and reached 3175m total measured depth in the Abu Madi Formation. NWK-1-4 flowed at about 450,000 cu m/d natural gas during clean-up testing, which was in line with expectations.
Mikhail Fridman, LetterOne’s chairman, was one of the original founders of Alfa Group, a member of the Board of Russian Union of Industrialists and Entrepreneurs and the International Advisory Board of the Council on Foreign Relations (USA). Fridman graduated from the Moscow Institute of Steel and Alloys in 1986.
LetterOne’s CEO is Jonathan Muir, who was CFO (2008-2013) and Vice President Finance and Control (2003-2008) at TNK-BP. He graduated from St. Andrews University in the UK and is a British Chartered Accountant and Fellow of the Institute of Chartered Accountants of England and Wales.
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