Russian billionaire Mikhail Fridman warns that the rapid switch from gas is ‘irresponsible’ – News Couple
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Russian billionaire Mikhail Fridman warns that the rapid switch from gas is ‘irresponsible’


Russian billionaire Mikhail Friedman has warned that moving too quickly from gas to renewable energy would be “dangerous and irresponsible,” arguing that the recent energy crisis can be attributed in part to the devaluation of the industry.

Friedman said he would invest more in alternative energy to reduce the carbon footprint of his oil and gas empire.

But he cautioned against cutting gas supplies too quickly, saying the recent price hike reflects a lack of investment by companies given the “massive mass pressure to decarbonise”, and the signal this gave to investors and banks to “cut off the relationship with the oil and gas business.”

He predicted that gas would be important to the energy mix for “tens of years”.

“The transition is a very complex and very difficult process,” he said in an interview with the Financial Times at his Mayfair headquarters. “Right now, we don’t have any viable alternative to living without gas.”

Friedman is one of the richest businessmen in Russia, but spends half of his time in the UK. Letter One, his holding group, has more than $10 billion to invest, and will announce its latest deal with a UK-based recycling company next week.

The company’s pre-tax profit for 2021 is expected to exceed $5 billion.

Friedman owns extensive property in Russia through the Alpha Group, which he co-founded in 1991, but created Liter One with his partners in London in 2013 using the $14 billion raised from the sale of a stake in oil company TNK-BP to Rosneft.

LetterOne’s biggest business is the energy division, headed by former BP chief John Brown, which the Financial Times could reveal last month’s Friedman Group after serving nearly seven years. Outside of energy, the investor has an extended portfolio that covers telecoms, financial services and retail businesses.

Friedman’s long-term strategy puts his company at odds with other investors in the sector.

He cited an upcoming dispute over the future of Wintershall Dea, Europe’s largest independent gas and oil company, in which LetterOne owns a third company, along with majority shareholder BASF. Lord Browne has also stepped down as Chairman of the Company’s Supervisory Board.

Noting the pressure the German company has faced from investors and activists over its stake in the gas producer, Friedman said there was a “discrimination in approach” between LetterOne and BASF. BASF wants to sell its stake in a 127-year-old German company through an initial public offering, but LetterOne wants to “build a long-term strategy.”

“For us, it’s a [long-term] Job contract job in the right direction. For BASF, it’s a little different.”

LetterOne is unlikely to sell in any initial public offering at this point, and will not prevent the process, but it may support the sale of a portion of the company to private equity buyers.

Friedman wants to support the company’s highly profitable gas business along with investing in the renewable energy business and technology that “reduces negative environmental damage.”

“Let’s try to combine these two approaches,” he said.

In the UK, LetterOne is investing up to £1 billion in fiber broadband in a regional infrastructure company called Upp, and in the healthcare sector it owns retailer Holland & Barrett, which Friedman said would have a new service-oriented business model alongside Along with the products.

He said that the general environment in the UK for the oligarch “has deteriorated due to the confrontation between Russia and the West”, but added that “on a personal level, it became a bit more friendly, because people distinguished between the general designation of the Russian oligarch and us personally.”

However, he said there was “a kind of competitive disadvantage to Russia” that would require “extra efforts to convince people that we are doing things right”.

He added that the UK government had “a lot of information to distinguish between good people and bad people . . . it would be important to find a way to distinguish between politics, and those who like me want to become ordinary citizens in business . . . we try to be as transparent as possible”.

The billionaire said he did not intend to give his five children any of his fortune, describing it as “dangerous” to inherit so much money and so important that they made their own way.

Unlike other Russian oligarchs, he is not a “charming person” with the “talent” to spend money. “I don’t have yachts. I don’t have planes. I have a house in London. I have a house in Moscow.”

Additional reporting by David Shepherd in London and Max Seddon in Moscow



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