The Blackstone Group has made its first foray into Southeast Asia’s oil and gas sector, forming an $800 million partnership with Kuala Lumpur-based Tamarind Energy to focus on oil and gas development in the region, according to the firm.
Tamarind is a newly established entity, formed by Blackstone and a 10-person management team, and will focus on growing production and reserves from producing oil and gas fields in Southeast Asia.
The team, made up of both locals and expatriates with experience in the region, is investing alongside Blackstone to create an upstream oil and gas development company and build strategic relationships with host governments, Southeast Asian national oil companies and regional stakeholders.
Tamarind will mostly focus on the Indonesian and Malaysian markets.
Blackstone will own almost 100 percent of the company, investing from two of its global funds, the $16.7 billion Blackstone Capital Partners VI and Blackstone Energy Partners I, which will each invest an equal amount of capital into the business.
Blackstone Energy Partners is a $2.5 billion vehicle, which has a 1:1 co-investment structure with the firm’s private equity vehicle to invest in energy opportunities globally.
“Malaysia and Indonesia have different characteristics than North America. Different technical aspects, different cultural aspects, and different partners. [For example], within Malaysia, Petronas is the national company and is a best-in-class company,” Angelo Acconcia, managing director with Blackstone Energy Partners, told Private Equity International.
“What attracted us to the region, specifically with Malaysia and Indonesia, is that they are established and developed hydro-carbon basins with a strong body of law, contract sanctity and regulatory environments led by the national companies that have a great reputation.”
Blackstone senior managing director and chief executive of Blackstone Energy Partners, David Foley, said in a statement, “Our partnership with Tamarind is another example of our growing global energy practice and the track record we have of identifying and backing best in class managers to build world scale energy businesses. This investment further underlines our strong support and commitment to Southeast Asia following Blackstone’s Singapore office opening late last year.”
Blackstone officially opened its Singapore office in October last year, although had staff on the ground there for months prior to the launch. The move signaled its intention to become increasingly active in the sub-region. Both Blackstone's private equity and energy investment teams have investment professionals in Singapore.
However, Blackstone’s Asia team experienced high turnover at the leadership level last year, with its India, Australia and China chairmen departing the firm within a few months of one another for various reasons.
Moreover, the firm’s Asia head, Michael Chae, relocated back to the US in April this year, having been based in the firm’s Hong Kong office building Blackstone’s Asia business for three years.
From New York, Chae will continue to oversee Blackstone’s private equity activities in Asia-Pacific and be responsible for media and communications sector investments.