The Carlyle Group to acquire Occidental’s onshore operations in Colombia
London, UK and Bogota, Colombia: 1 October 2020 - Global investment firm, The Carlyle Group (NASDAQ: CG), today announced that it has agreed to acquire Occidental’s entire onshore portfolio in Colombia (“Colombia Onshore”) for a total consideration of approximately $825 million with $700 million to be paid up-front, and the remainder payable subject to certain production and commodity price targets. The transaction is subject to customary regulatory approvals and is expected to close in Q4 2020.
Active in Colombia for over four decades, Colombia Onshore has well-established oil operations producing 33 thousand barrels of oil per day, on a net basis. The company’s 14 onshore blocks consist of six blocks in oil production and eight blocks in oil exploration. Its most significant activities are in the Llanos Norte Basin (Department of Arauca) where the business has produced more than 1.4 billion barrels of oil since the discovery of the Caño Limón field in 1983, and in the Middle Magdalena Basin (Department of Santander) where the company participates in Colombia’s oldest field, which started production in 1918.
Equity for the transaction will come from the Carlyle International Energy Partners (“CIEP”) platform, which invests in oil and gas opportunities outside North America - notably in Europe, Africa, Latin America and Asia. CIEP has long since recognized Colombia as an attractive country to invest in given its large and productive oil & gas industry and stable history of oil & gas production. CIEP has significant experience in country, including through two active investments that operate in the Colombian upstream sector: COG Energy and CEPSA.
Drawing on its local market knowledge and deep energy expertise, Carlyle will pursue a strategy of field life extension and operating efficiency, as well as building on Colombia Onshore’s leading ESG initiatives. There is also the potential for the company to act as a platform for further growth in the region.
For its upstream investments in Colombia, Carlyle works with energy veteran Tony Hayward (ex-CEO of BP, current Chairman of Glencore). Mr Hayward will become Executive Chairman of the Colombia Onshore business. He has many years of extensive experience in Colombia, including being based in the country during his time at BP.
Marcel van Poecke, Head of Carlyle International Energy Partners, said: “We are excited to acquire Occidental’s onshore operations in Colombia. Through four decades, Occidental has established a high quality and resilient portfolio of assets in a country that is attractive for investment. We look forward to being responsible stewards through our significant experience of managing energy assets globally, our local industry knowledge, as well as leveraging the wealth of experience that Tony has amassed over his years in the sector.”
Tony Hayward, Executive Chairman of the Colombia Onshore business, said: “Colombia played a pivotal role in my early career at BP and I am excited by the opportunity to return to lead a major Colombian oil and gas business. The company has a significant presence in all of Colombia’s principal hydrocarbon basins with a portfolio of attractive onshore investment opportunities from production to development and exploration. It also has an exemplary track record in ESG - one that we will look to continue and improve on. I am also looking forward to continuing the business’ strategic partnership with Ecopetrol.”
Kirk Lovegrove & Company and Natixis were the M&A advisors to The Carlyle Group.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across four business segments: Corporate Private Equity, Real Assets, Global Credit and Investment Solutions. With $221 billion of assets under management as of June 30, 2020, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. The Carlyle Group employs more than 1,800 people in 31 offices across six continents. Further information is available at www.carlyle.com. Follow The Carlyle Group on Twitter @OneCarlyle.