From Financial Times
Carlyle’s new energy and natural resources division chairman to oversee $25 billion of assets under management and 107 active portfolio companies
Fund will buy companies active in the energy supply chain and will make acquisitions of assets — in exploration and production, refining and marketing as well as oilfield services
Carlyle is seeking to raise a $4bn fund to invest in oil and gas assets outside of North America, as the private equity group looks to take advantage of a pullback in spending from some of the world’s biggest energy companies after a brutal downturn.
Most private equity investment in the sector is concentrated in the US but Carlyle’s London-based team is looking at opportunities across Europe, Africa, Latin America and Asia.
Glenn Youngkin, the Washington-based buyout group’s co-chief executive, and Marcel van Poecke, soon-to-be chairman of its energy, natural resources and infrastructure division, met investors on Tuesday, two people at the gathering said.
The fund will buy companies active in the energy supply chain and will make acquisitions of assets — in exploration and production, refining and marketing as well as oilfield services — through them.
“Not so many investors are deploying money in Africa, the North Sea and Russia, so there is an opportunity” said an institutional investor with direct knowledge of the new fund. The fundraising comes as international oil majors prioritise cutting costs, paying down debt and returning money to investors through dividends and share buybacks after a collapse in oil prices battered their balance sheets. Brent crude fell from a 2014 peak of $115 a barrel to about $27 in early 2016.
They are also increasingly funnelling cash into so called short-cycle output, such as US shale, which generates returns quicker than conventional oil projects.
The new venture is a follow up to the Carlyle International Energy Partners (CIEP) fund launched in 2013 with $2.5bn. It will use the cash to make similar acquisitions, the two people said. Carlyle declined to comment. Last year Carlyle’s Assala Energy acquired Shell’s onshore assets in Gabon.
Separately, its Neptune Energy Group acquired Engie E&P which has exploration and production assets in the North Sea as well as north Africa and South East Asia. “It’s clear that we [the industry] haven’t invested the capital which we should have invested in the industry in the last four years, basically because of a collapse in prices,” said Mr van Poecke in a recent interview with the FT. But not only did investment into new production slow, dealmaking also halted. “Everyone stopped,” he added.
Mr van Poecke said a recent pick-up in prices towards $80 a barrel should foster mergers and acquisitions in what he said was “a very liquid market”, even as some bargain assets had disappeared and as some industry executives remained wary about market volatility.
“I think we’ll see bigger transactions,” he said. “From an investor’s point of view, I think this is an interesting market to invest in.”
Mr van Poecke will begin his role as chairman of Carlyle’s energy and natural resources division at the end of year and will oversee $25bn of assets under management and 107 active portfolio companies as well as overseeing the two CIEP funds.
From Oil & Gas 360:
