Carlyle backs Boru in Africa plunge

The Carlyle Group is backing a new sub-Saharan Africa focused company through a partnership with Aidan Heavy and Tom Hickey.

Boru Energy intends to buy non-operated stakes in oil and gas producing assets. It will have a cash pot of up to $1 billion, a statement from Carlyle said. The plan is to acquire stakes across a number of countries in sub-Saharan Africa. The assets should have “significant commercialisation potential” with a well-regarded operator.

The funds will come from Carlyle International Energy Partners (CIEP), a fund with interests throughout the oil and gas sector, in Europe, Africa, Latin America and Asia. CIEP’s first move into Africa came via Assala Energy, which bought Shell’s onshore assets in Gabon.

As always with such private equity backed investment plans, the people involved are key. CIEP is led by Marcel van Poecke and Bob Maguire. Van Poecke is also the chairman of Oranje-Nassau Energie, which works in the North Sea and West Africa.

Heavey and Hickey are both former Tullow Oil executives. Heavey founded Tullow, overseeing its rise from a Senegalese gas developer to the leading African independent, with production of more than 80,000 barrels of oil equivalent per day. Hickey was the CFO of Tullow from 2000 to 2008. He went on to act as finance director for Petroceltic before quitting as the company was acquired by Worldview Capital in 2016.

Van Poecke said Heavey and Hickey both had “proven track records of successfully growing significant energy investments”.

“We will seek to invest to secure and increase production levels, extend field life cycles and support partners and governments to achieve long term, sustainable growth and create value,” said Heavey.

The Assala deal saw the company pay $628 million, and take on $285mn in debt, to Shell for mature Gabonese assets. This left the super-major with exploration and development opportunities in the country’s offshore. Assala went on to buy further Gabonese assets from Total. Assala’s CEO, David Roux, is also a former Tullow executive in Gabon, having previously worked for Vaalco Energy in country.

Private equity-backed companies have had some successes in Africa, particularly as banks have become more leery of the associated risks. Most notably, Kosmos Energy has been involved in a number of discoveries off West Africa, including in Ghana with Tullow, and has managed to strike partnership deals with BP and Shell. Kosmos is working with Warburg Pincus-backed Trident Energy in Equatorial Guinea on producing fields sold off by Hess – and making handsome rewards.

On the other hand, Cobalt International Energy made some strong progress in Angolan exploration but ultimately failed amidst the oil price crash – and Sonangol’s difficulties in paying its bills.

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