The US private equity group, Carlyle, are preparing to use the growing investor appetite for the oil industry by raising more than $2.5bn to buy oil and gas assets outside North America.
Most private equity investment in oil and gas is concentrated in the US but Carlyle has a London-based team hunting alternative opportunities from the North Sea to Southeast Asia.
Carlyle International Energy Partners fund was launched in 2013 with $2.5bn of investment. Insider information has suggested that it is aiming to exceed that figure when it starts raising a follow on fund this summer.
Carlyle is close to completing the dispersal of its initial fund. These acquisitions range from Royal Dutch Shell’s onshore production assets in Gabon to Varo energy, a Swiss refining and distribution business co-owned with Vitol. It also teamed up last year with CVC Capital Partners, a rival private equity group, to buy the oil and gas assets of Engie, the French utility.
Further assets will be targeted across the sector in Europe, Asia, Africa and South America.
Other private equity groups have also been moving into non-US oil and gas. The main growth was seen after the 2014 crash in crude prices which put oil companies under pressure to sell assets in order to cut debts. EIG, the energy focused US private equity group, was the main backer of last year’s $3.8bn acquisition of North Sea assets from Shell by Chrysaor of the Uk.
As oil prices are currently at a 3 year high of $70 per barrel it has revived wider investor interest in oil. This should help Carlyle raise funds but may mean it will be harder to pick up bargain assets.
Carlyle has said it is aiming to raise $100bn by 2020 as it looks to benefit from investor’s increasing appetite for alternative investments.