BASF weighs transfer of Wintershall's Russian assets to co-owner, source says

By Ludwig Burger

FRANKFURT (Reuters) - BASF is looking into transferring Russian assets of its oil and gas business Wintershall Dea to co-investor LetterOne, a person familiar with the matter said, as the German chemicals giant tries to extricate itself from businesses in Russia.

Offloading the assets could allow BASF to revive plans for an initial public offering of the remaining energy business, after it faced opposition against a listing from investment partner LetterOne.

BASF said last week it had for now given up efforts to separately list Wintershall Dea due to the joint-venture's exposure in Russia, which is under Western-led sanctions for its invasion of Ukraine.

BASF said at the time it was still determined in principle to withdraw from the oil and gas business. It is also preparing to wind down the company’s remaining business activities in Russia by early July, excluding products for food production.

There was, however, scepticism whether LetterOne would consider a transaction that would increase its exposure to Russia, the source and another person familiar with the matter told Reuters.

BASF and LetterOne declined to comment.

Wintershall, which derives about half of its oil and gas production from Russia, deferred to BASF on the matter, when asked for comment.

BASF's considerations were first reported by Bloomberg.

The German group owns a 72.7% stake in Wintershall Dea and the remainder is held by Letter One. The Russian investors behind LetterOne, Mikhail Fridman and Petr Aven, stepped down from the investment company's board after the European Union imposed sanctions on them.

Billionaire Fridman said in a statement last month that the war in Ukraine was a tragedy and that it should stop.

(Reporting by Ludwig Burger; Editing by Louise Heavens, Sabine Wollrab and Emelia Sithole-Matarise)