American private equity firm Carlyle Group has announced plans to raise a $4bn fund for investments in oil and gas assets outside North America.
The announcement comes as other energy companies start to decrease their spending following a general downturn, with investors commenting that Carlyle is looking to take advantage of the opportunity.
Carlyle will access and buy assets in exploration, production, refining, marketing and oilfield services via the purchase of energy companies throughout the sector’s supply chain.
According to the Financial Times, the firm’s London-based team is also exploring possible investment opportunities in Europe, Africa, Latin America and Asia.
News of the fund comes amid reports of international oil firms cutting costs, paying down debt and returning money to investors via dividends and share buybacks, following the negative impact of a collapse in oil prices. Funds are also being increasingly channelled into ‘short-cycle’ energy sources, such as US shale, as they have faster returns than conventional oil projects. There is, however, a danger in that shale has more rapid decline rates and thus makes global oil supply more susceptible to collapse.
The Washington-based company launched its overseas energy investment fund, Carlyle International Energy Partners (CIEP), in 2013 with $2.5bn. The firm has gone on to make some major deals in the subsequent years. Its Assala Energy acquired onshore assets in Gabon from Shell, while its Neptune Energy Group purchased Engie E&P, which offered exploration and production assets in the North Sea, North Africa and South East Asia.
In November last year, Reuters reported that the firm was raising $1bn for a new fund for oil and gas investments outside of the US.
Carlyle has declined to comment on reports of its latest fund. However, in a previous interview with the Financial Times, the soon-to-be chairman of Carlyle’s energy, natural resources and infrastructure division Marcel van Poecke said industry members ‘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’. He added that ‘from an investor’s point of view, I think this is an interesting market to invest in’.
Poecke is due to begin his role at the end of the year and will oversee $25bn of assets under management and 107 active portfolio companies as well as overseeing the two CIEP funds.