Chennai-based Invenire Energy acquires Tata Petrodyne in a $100-mn deal

This is the first instance of a private equity interest in Indian exploration sector

In a first sign of private equity (PE) interest in exploration and production in India, little-known Chennai-based Invenire Energy has taken over Tata Sons oil and gas arm Tata Petrodyne (TPL) in a $100-million deal.
 

Miami-based Atyant Capital holds a majority stake (two-thirds) in Invenire, incorporated in 2016. Invenire has also submitted bids for six oil and gas blocks — four in Assam Shelf basin and one each in Cambay and Rajasthan — in the second round of discovered small fields auction (DSF-II), the winners of which are to be announced this week.

TPL has interests in four blocks in India and four abroad, including in Tanzania and Indonesia. A source said that one of the reasons why Invenire was keen on TPL was its presence in Southeast Asia. 

Though the 151-year-old Tata group forayed into oil and gas in 1993, it had limited success in expanding the portfolio. Initially, the business was part of Tata Power. It was acquired by Tata Sons in 2005. 

A senior official from the Directorate General of Hydrocarbons (DGH) said it has given the final clearance for the transfer of blocks. Invenire has also got regulatory clearances from Indonesia and is waiting for a nod from the East African nation before the announcement of the acquisition of 100 per cent stake in TPL. 

The investment by a PE-backed company in the sector augurs well for India. Even the shale boom in the US was attributed to PEs’ interest in the sector.

“The presence of private equity firms in the Indian industry is good. Getting funding means the company will have to perform. If they are bidding for DSF, the advantage will be that these blocks are proven ones and the exploration part will not be required. They will only have to reasses the reservoir and start production,” said R S Sharma, former chairman of Oil and Natural Gas Corporation.

“Invenire has allocated $500 million equity to build a sustainable and profitable portfolio in the sector. The advantage with them is that the PE players are full-cycle investors. The company’s aim is to increase the production of the existing blocks (TPL) of around 4000 barrels of oil per day to 20,000 boepd by 2021,” said a person close to the development.