LONDON/FRANKFURT (Reuters) - German utility RWE (>> RWE AG) will complete a 5 billion euro (3.62 billion pounds) deal to sell oil and gas unit DEA [RWEDE.UL] to Russian tycoon Mikhail Fridman on Monday, despite a late British move to block part of the sale, the company said on Sunday.

The transaction, which will help reduce RWE's 31 billion euro debt pile, was originally unveiled in March last year but coincided with sanctions being imposed on Russia for its actions in Ukraine and raised questions in some EU countries about whether a European oil and gas business should fall into Russian hands.

Britain's Department of Energy said on Saturday it would block the sale of 12 oil and gas fields in the North Sea that was part of the deal, citing possible sanctions against Russia.

However, RWE said its arrangements with Fridman's LetterOne group meant the UK's decision would not affect the completion of the transaction, set for March 2.

"These agreements provide for a transfer of the entire RWE DEA group, including the UK business," RWE said in a statement.

"Only if the EU or the U.S. impose sanctions on LetterOne or its owners prior to the first anniversary of the completion, will RWE have to re-acquire the UK business," it said.

LetterOne has said it would keep DEA's British assets - worth about 1 billion euros - separate from the rest of the unit for a number of years.

If RWE were obliged to buy back the assets, it would then seek to sell them on to an independent third party.

LetterOne had sought a letter of comfort from the British government that it would not seize the fields if sanctions were imposed.

However, the Department of Energy said in a statement on Saturday: "If the proposed acquisition were to proceed in its current form, he (Energy Secretary Ed Davey) would be minded to require the companies to arrange for a further sale to a suitable third party."

The decision by Britain to block the deal was the first of its kind as it was not based on current sanctions, but on concerns about the impact of any future sanctions on LetterOne's owners might have on the operation of the fields.

(Reporting by Dmitry Zhdannikov, Jonathan Gould and Matthias Inverardi, editing by Ralph Boulton)

Stocks treated in this article : RWE AG, BP plc