How the British Lord built the largest private oil and gas company for Mikhail Friedman in Europe

Photo: Wikimedia / Letterone Group / CC by 2.0

Wintershall Dea, the new oil and gas company of Alfa-Group co-owners Mikhail Friedman, Hermann Khan and Alexei Kuzmichev, claims to be the largest independent oil and gas producer in Europe, and at the beginning of 2020-is prepared for IPO. At least this is counted by its creator - the former head of the BP and the legend of the world oil industry John Brown. Bloomberg tells how the British Lord at the age of 70 built a business worth about $ 30 billion for Russian partners.

The history of the new Alfa-Group oil and gas business began four years ago-Friedman “lying around $ 10 billion of extra money”, ironically describes Bloomberg. Then he called Brown and offered to induce his funds. Brown at that time has not worked in BP for several years, but was mainly engaged in organizing private transactions and advised the British government. The idea to build another oil and gas business from scratch greatly inspired the 70-year-old Lord, because it was a “return to his former life,” the agency writes.

• The first task of Brown , after he headed the oil and gas division of Letter One (L1), the management of the owners of the Alfa Group, was the purchase of the oil and gas business of the German concern, DEA, which conducts the prey in the North Sea, Egypt, Norway, Denmark, Germany and own licenses for fields in Algeria, the deposits in Algeria. Libya, Turkmenistan and Gayan.
• The purchase cost L1 in 5 billion euros -almost 40% of the funds proceeds from Alfa from the sale of a share in TNK-BP. But Brown convinced Friedman that one Dea was not enough to create a new serious player. To do this, he planned to enter the American market, but the partners eventually had to refuse the idea of ​​buying shale assets in Texas. In the midst of negotiations on Russia, accusations of interference with the American elections were rained down. It became clear that American regulators simply would not approve of a deal with Russian investors. Moreover, once L1 has already burned. The British authorities considered her transaction for the purchase of Dea for a year, but did not agree on the sale of assets on her at the British shelf of the North Sea.
• As a result, Brown persuaded Friedman to unite with another energy company. The first in the list of possible options was the oil “daughter” of the AP MOLLER-MARSK giant, but they were ahead of the French Total, who gave $ 7.45 billion in 2017, Bloomberg writes. The second attempt turned out to be more successful - in December of the same year it became known about the merger of the DEA with the German Wintershall, the “daughter” of the BASF chemical giant. The transaction, as a result of which BASF will receive 67% of the new company, and L1 - 33% should end by June. The United Dea-Wintershall will become the largest independent oil and gas producer in Europe.
• Brown is going to withdraw it to the IPO in the first quarter of 2020 - the company's assessment during the placement can be about $ 30 billion. But it can still grow - Brown is clearly not going to turn off its activity on the purchase or accession of new assets. In December, Dea for $ 500 million acquired one of the largest oil and gas companies in Mexico - Sierra Oil & Gas. The management company has $ 4 billion for additional investments.

"The Sun King." Twenty years ago, Brown managed to turn BP into an oil giant due to the purchase for $ 50 billion AMOCO large American oil company. The deal was so great and ambitious that it launched the consolidation process in the entire oil and gas market. Following the BP, other players began to negotiate about the associations: Exxon with Mobil, Chevron with Texaco and Total and others.

For all the time of his leadership, BP market capitalization has grown 46 times - from $ 5.4 billion to $ 250 billion. Brown has probably become the most praised British businessman of his generation. In 2002, Financial Times even christened him with the “sun king” in honor of the French monarch Louis XIV.

For many years, an impeccable reputation for many years did not save Lord Brown from the scandal. In 2007, after it became known that he lied to the court about the circumstances of his acquaintance with his former love partner, Brown resigned, announcing that he was probably “too long” in the company.

He manages to excellently turn transactions, quoted by Bloomberg quoted Nick Batler from King's College London-he worked with Brun in BP in the early 2000s: Brown could not help but still have a place for a new independent oil and gas company that could work in different parts of the Earth.

Liana Faizova