Blackstone, First Reserve, Petroplus team up in $2bn venture

The oil and gas sector is undiminished despite significant problems in most other areas of the buyout universe.

European oil and gas company Petroplus and energy buyout specialist First Reserve have partnered with US investment firm The Blackstone Group in a $2 billion (€1.3 billion) venture to invest in US energy companies, according to a statement.

Each firm will commit $667 million to the project.

The private equity firms’ strategic partner Petroplus is the largest independent refiner and wholesaler of petroleum products in Europe.

The partnership will assemble a small group of professionals in the US to examine opportunities. Thomas O’Malley, chairman of Petroplus, will act as the chief executive of the partnership.

Petroplus’s chief executive Robert Lavinia said the firm would continue to focus on its European investments but it was excited to be expanding its scope for its investors.

O’Malley worked as chairman and chief executive of Premcor when Blackstone invested in the company. The US investment firm’s chairman and chief executive Stephen Schwarzman said Blackstone knew O’Malley well from this time.

Fundraising by energy funds is ongoing. Sister magazine Private Equity International reported Riverstone Holdings, which recruited BP chief executive Lord Browne of Madingley last year, is targeting a total of $10 billion for its latest vehicles. This included a $6 billion global energy and power fund and a $4 billion renewables fund.

Other firms with energy funds in the market include ABN Amro, Natural Gas Partners, Swicorp, EnCap Investments and Tenaska.