PE-backed Invenire Energy acquires UK's Hardy Oil and Gas for $22 million

Invenire had recently bought a subsidiary of Jubilant Energy via insolvency process

Now, private equity firms are expanding their reach in India’s oil and gas sector, too. PE-backed Invenire Energy has acquired UK-based Hardy Oil and Gas, which holds participating interest in three hydrocarbon assets in India, for $22 million. 

This comes close on the heels of Invenire buying JEKPL (former Jubilant Energy Kharsang), a subsidiary of Hari Bhartia-promoted Jubilant Energy, through the insolvency process for around Rs 123 crore. 

Chennai-based Invenire had acquired 100 per cent in Tata Sons’ oil and gas arm Tata Petrodyne through a $100-million deal last year. 

Miami-based, India-focused fund Atyant Capital holds a majority stake in Invenire, which was incorporated in 2016. The limited partners or investors in Atyant Capital include US-based pension funds, insurance companies, endowments, and foundations. 

According to a source close to the development, a final deal was signed between Invenire and Hardy Oil on October 2. Hardy Oil holds 18 per cent interest in PY-3 block, 75 per cent in CY-OS/2, and 10 per cent in GS-01, in which Reliance Industries is the operator. The Hardy Oil deal by Invenire will also include liabilities to the tune of $13.5 million. 

 

Within a span of 10 days after Hardy Oil’s acquisition, the PE-backed company became successful in adding fresh life to its PY-3 oil field in the Bay of Bengal. This oil field was shut down in July 2011 after a drop in production. A management committee of PY-3 — where ONGC has 40 per cent, Hindustan Oil Exploration Company has 21 per cent, Tata Petrodyne has 21 per cent, and Hardy Oil had 18 per cent – was held in Delhi last week. With the acquisition of Tata son’s arm and Hardy Oil, Invenire now holds 39 per cent stake in PY-3. 

V P Joy, director general of the Directorate General of Hydrocarbons, and Amar Nath, the joint secretary in charge of exploration at the ministry of petroleum and natural gas, were also present at the first management committee of PY-3 after eight years. 

The PY-3 field ran into controversy after the London-listed Hardy Oil reportedly threatened to abandon the field, saying the government was not honoring production-sharing contract (PSC). In addition, in March 2017, Hardy Oil had initiated arbitration at an international court in Singapore against its partners to collect over $10 million associated with expenditures incurred by the company in fulfilling its responsibilities as operator of PY-3, including the amounts due to Samson Maritime, a service provider to the block. 

“One of the biggest contributors to the success story of India’s renewable energy sector has been private equity capital fuelling investment in the initial stages of development of the sector. Will be good to replicate similar success in PE investment in small discovered fields, city gas distribution, oil services companies, etc,” said Debasish Mishra, leader of energy, resources and industrial products for Deloitte India. 

The directors of Invenire include Atyant Capital founder and managing director Rahul Saraogi, former head of HOEC and Essar Oil Manish Maheshwari, and industry veteran Rajiv Hura. Invenire had also won a block in Assam during the second round of discovered small field auctions held earlier this year. 

“Our aim is to produce 23,000 barrels of oil per day by 2021. Our strategy is to reduce operating cost in our existing operations too,” a company official said. Within a span of a year, the company managed to hold its interest in 11 blocks including four blocks abroad (Tanzania and Indonesia).