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Carlyle’s $945mn acquisition of a portfolio of oil and gas projects from London-listed Energean has collapsed in a blow to the buyout group’s plans to build a Mediterranean-focused energy company.
The acquisition was set to be the latest foray into the upstream oil and gas sector by the US-headquartered fund, which has continued to buy and sell producing assets even as most of its competitors have backed away from such investments.
The two companies had set a deadline of Thursday to complete the deal, which was announced in June. Carlyle failed to secure “certain regulatory approvals” in Italy and Egypt and the companies were unable to reach an agreement on an extension, Energean said in a statement on Friday.
A Carlyle spokesperson said the group had made “significant and extensive efforts in good faith to close the transaction but ultimately was not able to satisfy all of the conditions”.
Carlyle had agreed to pay a guaranteed $820mn for the portfolio of assets in Egypt, Italy and Croatia, including $504mn in upfront cash, with further payments contingent on performance across the portfolio.
The principal regulatory hurdle concerned Italy and a requirement that Carlyle provide financial guarantees for the Italian subsidiary that would ultimately own the assets, people familiar with the process said.
Carlyle had planned to increase production from the projects to 50,000 barrels of oil equivalent a day, from about 34,000 boe/d in 2023, and then use the structure to make further acquisitions across the Mediterranean.
The new company was supposed to be chaired by former BP chief executive Tony Hayward, who is also chair of Carlyle’s Colombia-focused oil producer SierraCol.
Despite the setback, the private equity group is understood to remain interested in other oil and gas assets in the region.
Energean’s flagship development is the Karish gasfield offshore Israel, which began production in 2022 and pumped 112,000 boe/d last year.
“While I am disappointed that Carlyle was unable to obtain the necessary approvals in Italy and Egypt . . . I want to reaffirm that this outcome does not change our strategic direction or our commitment to growth and shareholder returns,” Energean chief executive Mathios Rigas said in a statement.
Energean shares were up 5 per cent in morning trading on Friday.
