Mikhail Fridman, chairman of Alfa Group, during a news conference in Moscow. Photo: Sergei Karpukhin/Reuters

German utility E.ON agreed to sell its Norwegian oil and gas business to Russian billionaire Mikhail Fridman in a deal worth £1.04 billion, continuing to shed assets before it will spin off its remaining oil and gas activities in 2016.

Shares in E.ON turned positive after the news and were up 1.4 per cent at 0929 GMT, leading the German blue-chip index.

E.ON holds around 30 licences in Norway but most are exploration assets and just a handful are in production, with none of them operated by E.ON.

Its major producing fields include Njord, operated by Statoil and Skarv, operated by BP.

The transaction, which is subject to regulatory approval, is expected to close by the end of the year, a spokesman said.

E.ON, Germany’s largest utility, decided to put its North Sea oil and gas exploration and production (E&P) business under review late last year, when it announced it would spin off energy trading, conventional generation and E&P into a separate unit, Uniper, in 2016.

E.ON said that the UK E&P business remains under review, adding it would “provide an update in due course”.

Sources had told Reuters last week that Fridman’s LetterOne fund had emerged as the frontrunner for the acquisition of E.ON’s Norwegian North Sea assets.