MOL Still Keen on RWE's O&G Unit if Rival Deal Fails

Hungary's MOL Group said it would be interested in re-entering talks to buy RWE's oil and gas unit DEA if a 5.1 billion euro ($6.5 billion) sale to Russian billionaire Mikhail Fridman falls through.

Investors and analysts have expressed concern about the deal since it was first announced in March, pointing to growing tensions between Europe and Russia over the Ukraine crisis.

DEA, which operates in 14 countries, owns stakes in about 190 oil and gas licences or concessions in Europe, the Middle East and North Africa. RWE requires approval from local governments to complete the transaction.

MOL and BASF unit Wintershall were among the other parties that submitted binding bids for DEA in March but lost out to Fridman-led fund LetterOne, sources said at the time.

MOL's renewed interest comes after a source familiar with the matter told Reuters that British Energy Secretary Ed Davey was "not minded" to sign a letter of assurance in light of recent sanctions against Russia, raising fears that the transaction could hit a snag.

"We are always open and approachable if someone from the industry wants to explore options," a spokesman for MOL Group said on Thursday.

Britain accounts for about a fifth of DEA's gas production and analysts have put the value of its British business at about 1 billion euros.

The lack of a comfort letter, a non-binding assurance from the government that it will transfer oil and gas licences, would not automatically block the deal, but it would in theory enable Britain to withhold licenses.

Analysts did not see this potential obstacle as a deal breaker.

"RWE could sell all DEA assets, bar UK, to LetterOne at a reduced price and sell the marketable UK assets separately to another investor, admittedly on an extended timetable," analysts at RBC Capital Markets wrote.

A spokeswoman for RWE, Germany's second-biggest utility, said it was possible "in theory" to take the UK assets out of the transaction, but it was not what both parties wanted.

RWE said it still planned to close the sale to LetterOne by the end of the year.

($1 = 0.7818 euro)

(By Christoph Steitz; Additional reporting by Tom Kaeckenhoff in Duesseldorf, William James in London and Frank Siebelt and Arno Schuetze in Frankfurt; Editing by Maria Sheahan and Jane Baird)