The Government has come under fire after a company owned by sanctioned Russian oligarchs purchased a 14.87 percent stake in the UK’s largest oil producer.
LetterOne, the investment company part-owned by oligarchs Mikhail Fridman and Petr Aven, completed the deal this week.
The deal dictates that LetterOne will receive a share of Harbour’s profits paid as dividends, but will have no voting rights.
If the sanctions on Fridman and Aven were to cease, they could convert their shares into voting shares.
LetterOne owns nearly £14billion’s worth of assets in various areas of business around the world, including in retailer Holland and Barrett.
Louis Wilson, Head of Fossil Fuel Investigations at Global Witness said: “The UK government and Harbour should have run a mile from this deal. 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.”
Fridman and Aven were sanctioned a month after Vladimir Putin sent his Russian troops into Ukraine in 2022.
Lieutenant Colonel Tobias Ellwood, former Conservative MP for Bournemouth East, told Express.co.uk of the development: “This is quite significant, especially given the context of sanctions on Petr Aven and Mikhail Fridman due to their connections to the Russian state. Harbour Energy is a major player in the UK’s oil sector, so any substantial investment from sanctioned oligarchs raises serious concerns, not only about compliance with international sanctions but also about the potential political and strategic implications for the UK’s energy security.
“From a legal standpoint, both the UK government and Harbour Energy will need to ensure rigorous due diligence to avoid breaching sanctions regulations. This could lead to scrutiny from regulators, as well as public and political backlash. It’s also worth considering the broader geopolitical context—this investment could be seen as Russia indirectly maintaining influence over vital energy assets in Europe, despite the sanctions intended to limit that power.
“There will likely be calls for further action from the government to prevent oligarchs from leveraging investments in critical industries like energy. The timing, given ongoing tensions with Russia, could make this a high-profile issue.”
A LetterOne spokesperson told the BBC: “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.”
In March, it was announced that UK homes, schools and other buildings will be heated by a subsidiary of a firm still importing Russian gas to Europe.
The UK Government and TotalEnergies Gas and Power reached an £8 billion deal lasting four years.
A UK government spokesperson defended the deal, saying that the “presence of Russian gas is extremely unlikely.”
But Mr Wilson of Global Witness said: “TotalEnergies is one of the largest buyers of Russian gas globally. They’ve played a key role in bringing Putin’s LNG, a crucial lifeline for Russia’s wartime economy, to market.”
In July, Prime Minister Sir Keir Starmer’s government rejected calls to ditch the deal.
They said: “We should never be left vulnerable to dictators like Putin, and energy independence is at the heart of our approach to delivering net zero.
“All imports of Russian fossil fuels are banned in response to Russia’s illegal invasion of Ukraine. The award of the contract followed all UK sanctions requirements and there is a negligible chance of any Russian gas being present in UK systems.”