The investment company of the Russian billionaire Mikhail Fridman said on Monday that it had appointed John Browne, a former chief executive of BP, as executive chairman of its oil and gas arm, L1 Energy, amid growing tensions with the British government.
Despite opposition from British leaders, Mr. Fridman’s investment company completed a deal on Monday to buy the oil and gas subsidiary of the German utility RWE, giving him access to holdings in a North Sea natural gas field called Breagh and to other British assets.
The deal reflects the ambitions of Mr. Fridman and Mr. Browne to build a global oil and gas production company, in part by taking advantage of low oil prices, which are likely to reduce the price of energy assets.
Over the weekend, the British government hardened its objections to the RWE deal, saying it was concerned that if Western sanctions against the Russian energy sector were extended to Mr. Fridman or his company, production at the North Sea operations might need to be shut down, creating safety and environmental risks.
RWE announced on Monday that it had completed the sale of the subsidiary, RWE Dea, to Mr. Fridman’s LetterOne holding company for 5.1 billion euros, or about $5.6 billion.
“Dea gets a new owner who wants to invest long term in the oil and gas production business,” Peter Terium, RWE’s chief executive, said in a statement.
LetterOne on Monday released a strongly worded letter from its chief executive, Jonathan Muir, to Edward Davey, the British energy minister. The letter said the company was “deeply disappointed” by Britain’s continued opposition to the acquisition, and it threatened legal action including seeking compensation for damages if London tried to force the company to sell those assets.
In hiring Mr. Browne, 67, Mr. Fridman is tapping an executive who is known for leading a series of deals at BP, beginning with the acquisition of Amoco in 1998 that transformed the oil company into one of the world’s largest.
“We are delighted that Lord Browne is joining us at L1 Energy,” Mr. Fridman said in a statement. “I have known John for many years as a valued business partner.”
Mr. Browne, who was already a paid adviser to L1 Energy, said in a statement that he and L1 Energy “share a unique ambition: to build a brand-new energy company at a time of great change in the sector.”
The appointment of Mr. Browne could be seen as the extension of an olive branch to the British government. L1 Energy and RWE have tried to address London’s concerns about the RWE Dea transaction by proposing to segregate the British operations, which account for an estimated 20 percent of the unit’s production, through a Dutch foundation.
RWE has also said it would buy back the British assets in the event LetterOne or its owners are targeted by sanctions by the European Union or the United States within a year of closing the deal.
The British government said that those proposals did not allay its concerns, and that it would consider requiring L1 Energy to sell its British assets to another operator.
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L1 Energy said that the RWE Dea sale had been approved by the authorities in the European Union, Germany and Ukraine, and that it reserved the right to challenge any British measures that it deemed unlawful.
In the letter released on Monday, LetterOne referred to correspondence RWE received from the British government detailing its concerns about the sale. “We do not accept that any of those reasons justified the position you have adopted,” LetterOne said.
The letter also criticizes the Department of Energy and Climate Change for waiting until 48 hours before the scheduled closing of the deal to respond to the Dutch foundation proposal and for posting Mr. Davey’s decision on the government website.
The letter warns that requiring a sale to another operator “would likely be disruptive to production by RWE Dea because of the time required, regulatory uncertainty, impact on investment and employees.”
LetterOne said that it would “seek judicial review” of a decision to force such a sale and that it reserved the right “to seek compensation for any damage caused to the value of our investment” by the government’s decision. LetterOne said it hoped the government would reconsider its position.
The Energy Department said on Sunday that it was unable to prevent the transaction but that it could require a change of ownership of the British assets. The government also indicated that it was willing to consider new proposals.
Britain’s resistance may be a sign that, despite the fact Mr. Browne and Mr. Fridman have $10 billion or more for acquisitions, they may run into obstacles at a time of growing tensions between Russia and the West over the conflict in Ukraine.
As he built BP into one of the most successful global companies, Mr. Browne gained prominence as a business leader and was appointed to the House of Lords. But his 12-year tenure as chief executive was marred by an explosion in 2005 at a Texas refinery that killed 15 workers. He resigned abruptly from BP in 2007 after losing a court battle with a London tabloid over details of his relationship with a younger man.
Since then, he has become an advocate for gay rights in the workplace. Last year, he published a book, “The Glass Closet: Why Coming Out Is Good Business,″ drawing on his own experiences.
Mr. Browne was also among the first of his peers to acknowledge a possible link between carbon emissions and global warming.
After leaving BP, Mr. Browne became a partner at Riverstone Holdings, a New York-based private equity firm that makes energy investments. His role as chairman of Cuadrilla Resources, a British shale gas explorer backed by Riverstone, has drawn criticism from environmental groups, and the company has so far been unsuccessful in developing shale gas in the country. While the British government supports extraction of shale gas, environmental activists and local groups have largely succeeded in preventing Cuadrilla and other companies from drilling and testing wells.
Mr. Browne suggested that he would cease his partnership at Riverstone Holdings. “I have enjoyed my eight years at Riverstone,” he said in a statement, “but it is now time to move back into a senior executive role in the energy sector.”
RWE Dea, which is based in Hamburg, Germany, has about 1,400 employees and operations in Egypt, Germany and Norway as well as Britain. Mr. Fridman and Mr. Browne have said they intend to use it as a platform on which to build a larger company.
The two have had a long and sometimes contentious business relationship. They formed TNK-BP in the early 2000s, when BP acquired a 50 percent stake in Russian oil and gas operations owned by Mr. Fridman and his partners.
The arrangement was a financial success but marred by infighting and legal battles, most of which occurred after Mr. Browne left BP in 2007. BP and Mr. Fridman’s group eventually sold TNK-BP to the state-controlled Russian energy giant Rosneft.
“Great partnerships are often formed in the face of adversity,” Mr. Browne said in a statement. He added that Mr. Fridman was “one of the shrewdest and most focused businesspeople that I know.”
By Stanley Reedmarch