Barclays Capital invests in Nio Petroleum

Barclays natural resource investments (BNRI), a division of Barclays Capital, has invested in a Southeast Asia-focused oil and gas development company Nio Petroleum.

Nio Petroleum is an oil and gas development and production company established in 2009, with a primary focus on offshore assets in the Asia-Pacific region, particularly Malaysia, Thailand, Vietnam, Indonesia and Australia. It seeks out undeveloped discoveries, marginal fields and late-life assets in Southeast Asia, which it will add value to through the innovative use of existing and new technologies and commercial know-how, Barclays Capital and Nio Petroleum said in a joint press release yesterday.

Nio Petroleum is founded and managed by Richard Hall and Rory Edwards, a duo with a track record in oil and gas development, derived from working with national and independent oil and service companies over the past 25 years. Their experience includes schemes in the North Sea and offshore Southeast Asia, which have enabled the monetisation of small fields or extended the life of mature fields.

The firm is funded by a $100 million equity facility from its management team and Barclays Capital. Hall is chief executive officer and Edwards is chief operating officer. Both Hall and Edwards are also on the Nio Petroleum board. Freddie Lee, a director at BNRI, is a non-executive director of Nio Petroleum.

BNRI was set up in 2006 to seek out and partner with operational management teams in specific niches of the natural resources sectors: upstream oil and gas; upstream mining; power; and renewables. It currently has 15 investment professionals across offices in London, New York and Sydney. BNRI partners with the teams it identifies to invest and create businesses in their niches. It provides a line of equity so that the teams can grow their businesses without having to rely on high levels of gearing to create returns. To date BNRI has committed $1 billion across nine portfolio companies.

"Southeast Asia offers many opportunities that are not meaningful for large companies but are attractive to investors and talented management teams who can apply innovative low-cost techniques to create value," said BNRI's Meb Somani, commenting on the rationale underlying the partnership with Nio Petroleum. Somani was earlier head of oil and gas at private equity investor Actis Capital and joined BNRI in the natural resources principal investment area in February this year.