Carlyle sees buyer’s market as oil majors shop $300 bln of assets

  • Companies splitting oil production from refining
  • Producers promise dividends, share buybacks
  • Carlyle invests in Europe’s refining sector

Marcel van Poecke of The Carlyle Group, managing director of its fund International Energy Partners, which specializes in European downstream investments, told a conference he saw the biggest buyers’ market of his career as oil majors continue splitting oil production from refining, sister news service Reuters reported.

“I’ve been in this business for 25 or 30 years. I’ve never seen the market with so many good assets for sale,” he told the FT Commodities Summit.

Earlier this year, Carlyle made a surprise foray into Europe’s struggling refining sector by teaming up with Swiss trading house Vitol to co-own refining, storage and distribution assets in Switzerland and Germany. Van Poecke said he saw other private equity firms repeating such deals around the world as more majors will follow in the footsteps of U.S. firms ConocoPhillips, Murphy Oil and Hess Corp, which have either spun off refining or are undergoing business restructuring.

“Investors say ‘We don’t need you to be an integrated company.’ …They say: ’We can buy BP for upstream and Valero for downstream. And we will create our own oil company’,” said Van Poecke.

Companies such as BP and Royal Dutch Shell have embarked on a capital diet after years of record spending on huge offshore or U.S. shale projects. They are now promising to return more money to shareholders through dividends and share buybacks. BP is selling assets worth around $40 billion and Shell plans to sell some $15 billion worth of assets.

“It is the buyer’s market,” said Van Poecke.

Dmitry Zhdannikov and Silvia Antonioli are correspondents for Reuters in London.