Carlyle Group’s planned purchase of a portfolio of oil and gas projects for $945 million from Energean has fallen through, marking a setback for the investment firm’s strategy to enhance its foothold in the Mediterranean energy sector.
The deal, initially announced in June, was meant to signify Carlyle’s continuing expansion into the upstream oil and gas industry, a path that many other investment firms have recently shied away from. Despite having set a deadline for the transaction to close by Thursday, the company did not secure the necessary regulatory approvals in Italy and Egypt, leading to the collapse of the agreement.
Energean stated that the two companies could not reach an agreement on extending the deadline. According to a spokesperson for Carlyle, the firm made significant efforts to finalize the deal but was unable to meet all conditions required for completion.
Carlyle had proposed a guaranteed payment of $820 million for Energean’s assets, which spanned locations in Egypt, Italy, and Croatia. This included an upfront cash payment of $504 million, with additional payments dependent on the performance of the assets.
A key regulatory issue involved requirements in Italy, where Carlyle was expected to provide financial assurances for the subsidiary that would manage the assets. Carlyle had plans to ramp up production from these projects, targeting an output of 50,000 barrels of oil equivalent per day, an increase from around 34,000 boe/d in 2023, as part of a strategy to eventually pursue further acquisitions in the region.
Tony Hayward, a former CEO of BP, was set to chair the new company, which would oversee these projects.
Despite this setback, Carlyle remains interested in exploring other oil and gas opportunities within the Mediterranean. Energean’s main development is the Karish gasfield off the coast of Israel, which started production in 2022 and delivered an output of 112,000 boe/d last year.
Energean’s CEO, Mathios Rigas, expressed disappointment over the failed acquisition but emphasized that it would not alter the company’s strategic goals or its commitment to growth and delivering value to shareholders. Following the news, Energean’s stock increased by 5% in early trading.