THE UK Government is facing criticism after two sanctioned Russian oligarchs became part-owners of a Scotland-based oil company.
The investment company LetterOne, which is part-owned by Mikhail Fridman and Petr Aven, completed a deal to buy 15% of Harbour Energy.
Harbour Energy is registered as a Scottish company and has an office in Edinburgh.
It is the largest oil and gas producer in UK waters and recently bought up the production assets of German firm Wintershall DEA.
As LetterOne was part-owner of Wintershall, shares were exchanged for shares in Harbour Energy.
It means that Fridman and Aven — who were sanctioned in March 2022 after Russia invaded Ukraine — now own 15% of the company.
While the deal states that LetterOne is not permitted any voting rights in Harbour Energy, it will still receive a share of the company's profits as dividends.
Around 50% of LetterOne is owned by Fridman and Aven, with the rest owned by unsanctioned Russian businessman Andrei Kosogov.
The investment business owns a large number of business assets, including health food retailed Holland and Barrett.
In 2022, LetterOne was forced by the then Tory-run UK Government to sell its stake in regional broadband provider Upp over concerns it represented a "risk to national security".
LetterOne denied the deal presented such a risk and appealed the decision.
However, Tory MP Alicia Kearns said Labour should have made a similar move to prevent the company purchasing part of Harbour Energy.
"Appalled and astounded Govt approved partial ownership of our largest oil and gas producer in the North Sea to sanctioned oligarchs Mikhail Fridman and Petr Aven," she said on X/Twitter.
"Energy security is national security. Russian oligarchs have no place in our energy infrastructure, especially when their wealth fuels Russia’s brutal and illegal bombardment of Ukraine.
"The Conservatives blocked his purchase of broadband connections on national security grounds when we were in Govt.
"It is particularly insulting this week following the devastation in Ukraine from Russian strikes on school children and hospitals.
"Yet again Labour diminishes our national security. We need immediate action to block this deal."
Appalled and astounded Govt approved partial ownership of our largest oil and gas producer in the North Sea to sanctioned oligarchs Mikhail Fridman and Petr Aven. Energy security is national security. Russian oligarchs have no place in our energy infrastructure, especially when…
— Alicia Kearns MP (@aliciakearns) September 4, 2024
The head of fossil fuel investigations at campaign group Global Witness, Louis Wilson, also said the UK Government should have acted to stop the deal going through.
"The UK Government and Harbour should have run a mile from this deal," he said.
“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’’.
A LetterOne spokesperson said: "LetterOne is committed to making long-term investments in businesses that matter.
“We are proud to be part of a bigger, stronger UK energy business that will bolster energy security, increase investment and create jobs while helping deliver the nation's ambitious energy transition goals."
