According to recent reports the world’s largest energy related private equity firm, Riverstone Holdings Limited, is planning to work with oil executive Miguel Galuccio in an effort to create a global energy venture. The partnership will help Riverstone get the additional financing it needs to take advantage of the opportunities available in the reformed gas and oil sector in Mexico. The two parties are said to be in negotiations with large sovereign-wealth funds and global investors with an interest in exploring attractive global energy sector opportunities in Mexico and elsewhere.
Since 2000, Riverstone founders David Leuschen and Pierre Lapeyre have garnered over $34 billion towards buyout and growth investment efforts through three listed vehicles and 9 private funds with connections to energy and power companies. With over 25 years’ experience working in the energy sector on 5 continents, Galuccio was recently nominated to join the board of Schlumberger Limited. The company is the world’s biggest gas and oil service concern and he’s a former employee of Schlumberger.
Riverstone is involved Mexico’s emerging energy market. About 17% of its capital is invested in the Gulf of Mexico with Fieldwood Energy LLC and Sierra Oil & Gas S de RL de CV. Through local pension funds Riverstone has already managed to raise over $750 million. Its push for further investment in Mexico comes ahead of energy sector reforms by the Mexican government. Industry analysts say there’s abundant gas and oil reserves in the market that can be developed using processes and technologies common in other parts of the world. Petroleos Mexicanos had monopolized the Mexican market for 75 years.
Galuccio was CEO of Argentina’s YPF SA. Through partnerships with Petroliam Nasional Bhd., Dow Chemical Corp. and Chevron Corporation he helped open up the Vaca Muerta deposit and made Argentina the second largest shale producer in the world after the U.S. He also helped get compensation for Repsol SA after Argentina nationalized its holdings in 2012. Galuccio helped Schlumberger develop a successful production model tying customer pay to boosts in output. He also helped open the vast oil and gas reserves in Mexico to private capital by spearheading new incentivized services contracts.
In December Mexico surpassed expectations when it held its first competitive auction for deep-water oil. Exxon Mobil, Chevron, CNOOC Ltd. and Total SA were awarded 8 of 10 blocks. The government this will spur an influx of foreign investment.