THE NEW RUSSIAN EMPIRE - 7
Russian billionaire Mikhail Fridman's LetterOne fund has asked Britain to delay an October deadline to sell its North Sea assets after a first round of offers disappointed, several sources said.
The British Energy Ministry in April gave Fridman six months to dispose of oil and gas fields LetterOne had acquired from German utility RWE or see the their licences revoked as the West tightened sanctions against Moscow over its role in Ukraine.
The sale process, which is advised by Morgan Stanley, has attracted interest from several buyers, including private equity funds which have built up resources over the past year for acquisitions in the sector, banking sources said.
The offers, which were submitted in July, nevertheless fell far short of LetterOne's target price of up to $1.2 billion, with the highest offers coming in at around $750 million, according to several sources close to the process.
The fund hopes to be able to re-tender the assets later this year. The current deadline expires on Oct. 20.
"LetterOne are talking to the UK government trying to defer the process and get more time in the hope of getting a better price," a banking source said.
The North Sea assets comprise of 11 oil and gas fields, including a 70 percent stake in the Breagh field which produces 3 percent of Britain's annual gas output.
LetterOne would not comment.
The Department for Energy and Climate Change told Reuters there was no change in its Oct. 20 deadline.
Many oil and gas companies have been trying to sell assets in the North Sea to boost their balannce sheets following the more than halving of oil prices since June 2014.
The merger and acquisition market has only seen a relatively small number of transactions as oil price volatility has kept buyer and seller valuations apart, according to bankers.
Consultancy 1Derrick said last month that so far this year there have been 20 transaction in the UK North Sea, including Total's sale of its 20 percent stake in the Laggan Tormore project for 565 million pounds.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.