Carlyle Group (CG.O) has announced plans to establish a new oil and gas company focusing on the Mediterranean, led by former BP CEO Tony Hayward. The initiative follows Carlyle’s agreement to purchase assets in Egypt, Italy, and Croatia from Energean (ENOG.L) for up to $945 million.
This strategic move positions Carlyle to capitalize on the burgeoning gas market in the eastern Mediterranean, spurred by rising demand in Egypt and Europe’s search for alternatives to Russian gas.
Carlyle International Energy Partners (CIEP), the private equity firm’s arm dedicated to energy investments outside the U.S., will oversee the new entity. Initially, the company is set to produce up to 47,000 barrels of oil per day across the three nations. Plans are underway to enhance these figures by upgrading current facilities and pursuing further acquisitions in the region, according to CIEP co-head Bob Mcguire. “There is considerable potential to develop these assets further, especially given the geological prospects and increasing gas requirements in Egypt and Italy,” Mcguire told Reuters.
Meanwhile, Energean is poised to extend its reach beyond its primary operations at an offshore gas facility in Israel into broader territories across Europe, the Middle East, and Africa, particularly in areas with strong policy support for natural gas and efforts to phase out coal. Energean’s CEO Mathios Rigas expressed satisfaction with the transaction, noting the significant return on their original investment. Following the announcement, Energean’s stock rose by 2.7%.
Analysts at Jefferies have valued the assets being sold at $1.28 billion, indicating that Carlyle’s acquisition comes at a 26% discount. Energean, which acquired these assets through its 2020 purchase of Edison’s oil and gas portfolio, disclosed that the deal includes a $504 million cash payment. Additionally, Energean plans to issue a $200 million special dividend and fully repay a $450 million corporate bond.
Post-deal, Energean anticipates a reevaluation of its dividend policy. The company reported producing 123,000 barrels of oil equivalent per day (boed) in 2023 and expects a rise in production in Egypt to between 29,000 and 31,000 boed in 2024, up from approximately 25,000 boed.
The newly formed company under CIEP will operate out of significant sites including Cassiopea, Italy’s largest gas field in terms of reserves, and Abu Qir, a major gas production hub in Egypt.
Over the past decade, CIEP has built a portfolio of oil and gas ventures under Hayward’s leadership, including Neptune Energy in the North Sea, Assala Energy in Gabon, and SierraCol in Colombia. Hayward, set to chair the new Mediterranean-focused company, remarked on the acquisition as a foundational step towards establishing a dominant regional entity in one of the world’s rapidly expanding natural gas markets.
