Carlyle Group to invest $500 million in India's Magna Energy

Mumbai: US-based private equity firm Carlyle Group on Monday said it will invest $500 million in Magna Energy Ltd, an India-focused upstream oil and gas company.

Magna aims to become a full-cycle oil and gas company through acquisitions and by securing local licences in India, Carlyle Group said in a statement. It will have a primary focus on development and production with a secondary focus on exploration.

“Magna’s expertise combined with additional capital and significant industry knowledge from Carlyle will help further develop the local oil and gas industry across the Indian subcontinent, leading to greater energy security, job creation and economic growth,” the statement said.

The investment will be made through Carlyle International Energy Partners (CIEP), a fund that focuses on oil and gas exploration and production, midstream, and refining and marketing in Europe, Africa, Latin America and Asia, the Carlyle statement said.

“This investment is led by managing director and head of CIEP Marcel van Poecke and managing director Bob Maguire,” it said.

Jann Brown and Mike Watts, Magna co-founders and joint chief executive officers, were quoted as saying that there is strong growth potential in countries such as India, Bangladesh and Myanmar, which seek to grow their local energy markets.

“Furthermore, we are excited at the prospect of helping to drive economic growth in the Indian subcontinent by bringing new technology and capital to the local oil and gas sector—India, in particular, is set to emerge shortly as the world’s fastest growing major global economy,” they were quoted as saying in the statement released on Monday morning.

Poecke of CIEP said the investment will help fund Magna’s development and production plans, allowing it to focus on cash generative and organic growth opportunities in the oil and gas sector across the subcontinent.

India’s energy consumption increased by 7.1% in 2014, reaching an all-time high and accounting for 34.7% of the global consumption increment in 2014, Mint reported on 10 June, quoting British oil and gas giant BP Plc’s review of world energy consumption in 2014.
The note by BP, called the BP Statistical Review 2014, said India’s domestic energy consumption reached an all-time high in 2014 with the year seeing the fastest growth for the last five years. This was mainly driven by the country’s coal consumption which increased by 11.1% contributing over half of the total energy needs of the company.

In fact, the country’s coal consumption was the largest in the world in 2014 and India was the third-largest coal market in the world.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.