Sector News

North Sea oil gets $500m vote of confidence from private equity

September 2, 2014

New energy group Siccar wins $500m of investment from leading private equity firms

The future of North Sea oil has been given a half a billion dollar vote of confidence by private equity firms, who have invested in a new energy group run by a former Centrica executive.

Blackstone Energy Partners, the energy division of one of the world’s biggest private equity funds, has teamed up with peer Blue Water Energy and Singapore’s sovereign wealth fund GIC to invest $500m (£301m) into exploration, development and production group Siccar Point Energy.

Led by Jonathan Roger, ex-managing director of Centrica Energy Upstream, Aberdeen-based Siccar Point plans to build up a portfolio of producing and commercial reserves in the UK Continental Shelf.

The company hopes to take advantage of some energy industry giants pulling out of North Sea because of its dwindling reserves, opening the way for more nimble smaller businesses.

“This is a great time to build a business in the North Sea for a well capitalised and experienced team with a focused strategy,” said Mr Roger in a statement. “It is a period during which some of the largest upstream companies are cutting back on capital expenditures and consolidating their global asset portfolios.

“We believe that selective capital deployment and efficient operations can deliver attractive returns in this environment.”

The amount of oil left in the North Sea has become a political football over the past few weeks with Scottish separatists hoping to use revenues from it to fund an independent Scotland.

Alex Salmond, Scotland’s First Minister, said 24bn barrels could be extracted in the future, basing his claims on data from industry body Oil & Gas UK.

However, this claim has contradicted by an independent commission’s report, which claimed this was an “aspirational” figure.

Melfort Campbell, the chair of the commission, said energy companies would be “hard pushed” to extract a 15bn to 16bn barrels.

A spokesman for Blue Water Energy said: “This is a quality investment with no shortage [of further funding] behind it. We would not be going into the [North Sea] unless there really good value assets that have potential.”

By Alan Tovey

Source: The Telegraph

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