(EnergyAsia, July 10 2012, Tuesday) — Three years after selling off integrated oil company Singapore Petroleum Company (SPC), rig builder Keppel Corp Limited is returning to being an oil producer with the purchase of a 20% stake in upstream company KrisEnergy for US$115 million.
In a statement, the world’s biggest builder of offshore rigs said it made the purchase through a wholly-owned subsidiary, resulting in enlarging the share capital of KrisEnergy, an independent upstream oil and gas company established in 2009 with a diverse portfolio in Southeast Asia.
KrisEnergy was previously 100% held by parent company KrisEnergy Holdings Ltd, whose major shareholder is First Reserve, a leading US-based global investment firm dedicated to the energy industry.
KrisEnergy operates six out of the 14 licences they hold in Cambodia, Indonesia, Thailand and Vietnam, covering a gross acreage exceeding 63,000 sq km.
With certified proven reserves of 14.4 million barrels of oil equivalent (mmboe), as of December 31 2011, its portfolio includes three offshore producing assets: the Kambuna gas-condensate field in Indonesia and the B8/32 and B9A oil and gas blocks in the Gulf of Thailand. The other 11 contract areas comprise a combination of development projects and exploration prospects.
Last year, KrisEnergy’s three producing fields averaged 4,800 barrels of oil equivalent per day (boepd).
Choo Chiau Beng, Keppel Corp’s CEO, and Loh Chin Hua, the company’s CFO, will be appointed to the KrisEnergy board as non-executive directors.
Mr Choo said: “As an investor, we believe that KrisEnergy’s portfolio has long-term growth potential and could offer sustainable returns over the long run.”
Keith Cameron, KrisEnergy’s CEO, said: “Keppel Corp’s strategic positioning is a validation for KrisEnergy and will support our growth. Keppel is the world leader in offshore rig design, construction, as well as repair and has enormous technical resources as well as global reach.”
Mr Cameron was a founder and CEO of Pearl Energy, which was listed on SGX and sold to Abu Dhabi-listed Aabar Petroleum in 2006 and then to Mubadala Development Company, a state-owned investment fund of the UAE in 2008.
Will Honeybourne, KrisEnergy non-executive chairman and First Reserve managing director, said:
“As the majority shareholder, First Reserve is extremely supportive of this relationship given Keppel’s global reach, technologies, and experience. KrisEnergy is an excellent example of First Reserve’s value creation strategy which includes supporting world class management teams.”
Founded in 1983, First Reserve is a leading global investment firm dedicated to the energy industry with over US$23 billion of raised capital since inception. With offices in North America, Europe and Asia, the company First Reserve is well-positioned to make strategic investments on a global basis across the energy value chain.
Citing the need to focus on its core businesses, Singapore-listed Keppel Corp sold off its majority holding in SPC, which held stakes in producing fields, storage tanks and a refinery, to state-owned PetroChina in 2009.