Carlyle to invest $500 mn in India-focused Magna Energy

US-based alternative asset manager, The Carlyle Group, will invest $500 million in Magna Energy Ltd, a South Asia-focused upstream oil and gas company led by former Cairn Energy Plc executives.

Led by industry veterans Mike Watts and Jann Brown, Magna says it is targeting "the building of acreage positions in the Indian subcontinent, with the objective of creating a full-cycle oil and gas company" through acquisitions and local licensing rounds.

Magna said its primary focus will be development and production with a secondary focus on exploration. Carlyle said the investment will help the energy company to develop its oil and gas projects across the Indian subcontinent.

Funding for the investment will come from Carlyle International Energy Partners (CIEP), a fund that focuses on oil and gas exploration and production, midstream, and refining and marketing in Europe, Africa, Latin America and Asia.  This investment is led by managing director and head of CIEP Marcel van Poecke and managing director Bob Maguire.

''We're delighted CIEP has agreed to support the Magna leadership team with a significant equity investment as we seek to build our business across South Asia - a region we both know well. We believe there is strong growth potential in countries such as India, Bangladesh and Myanmar, which seek to grow their local energy markets,'' Jann Brown and Mike Watts, Magna co-founders and joint CEOs, said. 

Furthermore, he said, bringing new technology and capital is important to the local oil and gas sector, particularly in India, which is set to emerge shortly as the world's fastest growing major global economy.''

''We are pleased to partner with Jann Brown and Mike Watts, who have a long history of success in the Indian subcontinent. CIEP will provide capability and support through its global energy platform as we seek to participate in the economic growth of India and neighbouring countries,'' added Marcel van Poecke, managing director and head of CIEP.

India's energy consumption increased by 7.1 per cent in 2014, reaching an all-time high and accounted for 34.7 per cent of incremental global consumption in 2014, according to BP Plc's review of world energy consumption in 2014.

According to the BP Statistical Review 2014, India's domestic energy consumption reached an all-time high in 2014 with the year seeing the fastest growth for the last five years.

This was mainly driven by the country's coal consumption which increased by 11.1 per cent contributing over half of the total energy needs of the company.

The country's coal consumption was also the largest in the world in 2014 and India was the third-largest coal market in the world.