* Economy ministry says energy supply not at risk
* Go-ahead comes amid strained German-Russian relations
* 5 bln euro DEA deal major plank of RWE's drive to cut debt
(Releads on official confirmation)
FRANKFURT/BERLIN, Aug 22 Germany's economy
ministry approved the sale of utility RWE's oil and
gas unit DEA to a Russian investor despite tensions between
Russia and the West over the Ukraine crisis.
The go-ahead announced on Friday removes the biggest hurdle
for the 5.1 billion euro ($6.9 billion) sale, a major plank in
RWE's struggle to reduce a debt burden of more than 30 billion
As part of the deal, Russian tycoon Mikhail Fridman and his
co-investors will get stakes in about 190 oil and gas licenses
or concessions in Europe, the Middle East and North Africa.
Relations between Russia and the West were already
deteriorating over Ukraine when the deal was announced in March.
The European Union and the United States have imposed
economic sanctions against Russia for its annexation of
Ukraine's Crimea region and its backing of pro-Russian
separatists, who are fighting against government forces in
eastern Ukraine. Russia, in turn, has slapped bans on Western
But Deputy Economy Minister Stefan Kapferer told journalists
on Friday that the government found that the deal would not
endanger Germany's energy supply and the buyer consortium's
European Union base had also been a decisive factor.
The European Union's antitrust watchdog has already given
the green light but regulators in a few other countries, which
RWE declined to name, have yet to give their approvals.
DEA has operations in about a dozen countries, including
Britain, Norway, Denmark and Egypt.
The German government could theoretically have used a clause
in its foreign trade law that allows it to block takeover deals
that threaten "public safety and order", but it would have been
an unprecedented move.
RWE, Germany's largest power producer, has previously said
it expects the deal to be finalised this year.
"We will now pursue the process further as planned," the
company said in a statement on Friday.
RWE, like other German utilities, is struggling to adjust to
a power sector shake-up as Germany moves away from nuclear
energy and encourages a shift to renewables, while Europe's
energy demand is weak.
The debt-burdened firm's market value has halved in four
RWE has been looking for ways to reduce its debt, including
cutting jobs and shedding assets, such as the 1.6 billion euro
sale of Czech gas pipeline operator Net4Gas last year.
($1 = 0.7345 Euros)
(Reporting by Alexander Hübner, Tom Käckenhoff und Gernot
Heller; Writing by Ludwig Burger; Editing by Michael Urquhart)