Fracking boss Lord Browne has been named the executive chairman of L1 Energy—an oil and gas firm backed by Russian billionaire Mikhail Fridman—it was announced this week.
The former BP boss stepped down from his position as chairman at UK shale gas company Cuadrilla to join the Russian energy company. He has also left his role as co-head of Riverstone’s Renewable Energy Fund.
The move has triggered much controversy. Lord Browne has been advising Fridman since 2013 but his decision to join the oligarch’s firm puts him in the middle of a heated legal battle between the Russian company and British government.
The news also comes at a time of growing uncertainty about the prospects of a UK shale gas revolution. DeSmog UK recently reported that one of Cuadrilla’s investors, AJ Lucas, suffered a dramatic fall in share price.
And yesterday, experts warned that the role of British shale as a ‘transition fuel’ to a low-carbon economy “should not be taken for granted”.
However, Lord Browne might not be moving too far from fracking as L1 Energy is reported to be looking at possible takeover targets, including companies involved in US shale gas as well as companies in east Asia and parts of Europe.
North Sea Deal
Lord Browne’s appointment to L1 Energy follows a contentious deal made between German energy company RWE and Fridman’s $29bn investment fund, LetterOne.
Last weekend, LetterOne agreed a €5bn (£3.6bn) deal to buy 12 oil and gas fields in the North Sea from RWE. L1 Energy was created as a new subsidiary to LetterOne as part of this agreement.
So much for all the #fracking vs Putin rhetoric – @Cuadrilla chair L Browne leaves #shalegas job for Russian billionaire’s oil & gas firm
— Stefano Gelmini (@gelmo1981) March 2, 2015
The North Sea deal went through despite objections from the UK government that production at the fields could be halted if the West imposes more sanctions on Russia over Ukraine.
Russian President Vladimir Putin has threatened once again to cut off gas supplies to Europe in retaliation to the ongoing dispute.
Legal Action
Fridman, however, has said he will sue the British government if it tries to stop LetterOne’s deal with RWE due to the crisis in Ukraine. Lord Browne was appointed chairman of L1 Energy on Monday, the same day as the oligarch threatened legal action.
Ed Davey, secretary of the Department for Energy and Climate Change (DECC), has expressed concern about the possible impact on North Sea oil production should economic sanctions be tightened.
The government is asking that the RWE Dea North Sea division be sold to a third party instead of LetterOne.
Yesterday, Davey gave Fridman seven days to explain why he should not be forced to sell the North Sea gas assets.
Photo: The Telegraph via Creative Commons
