First Reserve commits $350m to oil exploration company

The energy-focussed private equity firm is the latest buyout shop to invest in Cobalt International Energy, a company that last year received $500 million from Riverstone and Goldman Sachs.

Cobalt International Energy has gained another big-name buyout partner: First Reserve Corporation has committed $350 million (€237 million) to the oil and gas exploration firm.

Last year, the company received a $500 million investment from Goldman Sachs Capital Partners and Riverstone Holdings, an energy-focussed private equity firm launched in 2000 in partnership with The Carlyle Group.

Cobalt is headquartered in Houston, Texas and targets the deepwater Gulf of Mexico and “other high potential global basins”, including West Africa, according to a statement.

“Pairing their expertise with the latest geophysical data, tools and processes, the team has captured a set of deepwater asset to rival that of most super-independents and some of the major oil companies,” William Macaulay, First Reserve chairman and chief executive, said in a statement.

At last month’s Gulf of Mexico lease sale auction, Cobalt was the high bidder for 53 blocks, bidding $211 million, and won more highly contested blocks than any other company, the firm said. If all are awarded, it will own 107 blocks, more than half of which are Cobalt-operated, it said.

Cobalt is led by former Unocal president and chief operating officer Joseph Bryant. Mobil Corp. and Unocal vet Samuel Gillespie is its vice chairman and Unocal’s former executive vice president of exploration James Painter has the same role at Cobalt.

Last month, First Reserve committed $300 million to form Diamond S Holdings to invest in energy-related shipping assets with shipping industry executive Craig Stevenson. The buyout firm’s most recent private equity fund, First Reserve Fund XI, closed on $7.8 billion in September 2006 and is the largest energy-focussed global fund raised to date.