THE business climate in Britain’s oil and gas industry is as daunting as the winter weather in the North Sea. Even before the oil-price fall last year, elderly fields were depleting fast and new finds were scarce. The regulatory regime favours the existing owners of platforms and pipelines and deters newcomers. Now the industry, which employs 450,000 people and pays almost £5 billion ($7.7 billion) in taxes a year, faces the worst outlook in 40 years. Exploration has slowed sharply; job losses are rising.

So one might think that a wealthy foreign investor would be welcome. LetterOne, a Luxembourg-based investment fund run by Mikhail Fridman, a Russian tycoon, this week paid €5.1 billion (£3.6 billion, $5.6 billion) to buy 12 oil- and gasfields belonging to RWE, an ailing German energy conglomerate, with the possibility of more investment to come. But the British government is trying to force Mr Fridman to sell the assets to a third party. Future sanctions imposed by America on Russia could, it fears, stop operations, entailing economic losses or safety risks.

The decision seems odd. Mr Fridman had instituted what someone close to the deal calls “belt and braces” safeguards to protect production in the event of new sanctions. For the first year, ownership reverts automatically to RWE. After that, a Dutch foundation takes over.

Moreover, Mr Fridman is hardly a Kremlin crony. This weekend he flew from London to Moscow to attend the funeral of Boris Nemtsov, the murdered opposition leader (the rest of Russia’s business elite was mostly notable by its absence). Britain’s biggest energy company, BP, has a controversial but so far lucrative partnership with Rosneft, the main Russian oil company, which is close to the Kremlin. The risk of that relationship going wrong should be a rather greater worry.

Another oddity is that the man Mr Fridman has chosen to chair LetterOne’s energy division, Lord (John) Browne, is a former boss of BP. He piloted the company through a bruising battle over strategy with its previous Russian partners, TNK, a firm in which Mr Fridman happened to be a leading shareholder. That tussle does not seem to have left lasting scars. Lord Browne’s recent memoir describes Mr Fridman as “civil and charming”, “tough and hardworking”, a “superb negotiator” and “extremely focused”.

Mr Fridman threatened to go to court, calling the government’s objections to the deal belated, hurried and irrational. On March 4th the energy minister, Ed Davey, backtracked, giving Mr Fridman a week to make his case.

A bigger worry should be the future of the North Sea. Britain’s regime, unlike Norway’s, does not encourage oilmen to keep going in lean years. Statoil, the state-owned Norwegian company, has just invested $9 billion in the first phase of the new Johan Sverdrup field, which will by 2025 produce more than all Britain’s wells. Collapsing confidence now could leave six billion barrels of oil stranded, says Sir Ian Wood, a veteran industry-watcher.

True, some of the industry’s woes are of its own making, such as grotesquely inflated wage costs (now shrinking fast) and complacency (punctured). But others are the result of haphazard policymaking (14 energy ministers in 17 years) and high, complex taxation, such as a supplementary levy introduced by George Osborne, the chancellor, in 2011. The marginal tax rate on some production is as much as 80%.

The government is tweaking the tax regime, offering companies the chance to offset more losses against costs. It is offering to pay part of the multi-billion pound decommissioning bill. Perhaps it should be a bit nicer to foreigners wanting to risk their cash in the North Sea’s bracing climate.