Chief executive officer Ian Angell told StarBiz that he expected to work closely with Petronas and for Malaysia to be Tamarind Energy’s largest country of investment.
“Petronas is probably the most progressive national oil company (NOC) in the region. It has pioneered new contract and fiscal terms, such as the risk-sharing contract and tax incentives for marginal fields, which is good for independent E&P (exploration and production) companies like ours,” he said in a phone interview.
The firm, which is setting up its headquarters in Kuala Lumpur, said last month that it had secured a capital commitment of up to US$800mil from Blackstone Energy Partners – the New York-based private equity giant’s maiden O&G investment in South-East Asia – with Tamarind Energy’s management also contributing.
Its stake in Tamarind Energy was not publicly disclosed, but Blackstone will hold most of the equity in Tamarind Energy, Angell said.
Tamarind Energy is the second US private equity-funded energy start-up based out of Malaysia after Ping Petroleum.
Tamarind Energy planned to grow production and reserves in mature and under-exploited fields that were producing, but lack the reservoir management and infrastructure to reach their full potential, Angell explained.
The 10-man team at Tamarind Energy, comprising some veteran O&G executives previously from Canada’s Talisman Energy, is eyeing brownfields in shallow water and onshore basins across South-East Asia and will work with host governments, NOCs and others to acquire interests in such fields.
Small, primarily Asia-based upstream players like Tamarind Energy, Ping Petroleum and KrisEnergy have mushroomed in recent years to take advantage of a growing number of asset sales in the region as North American international oil companies (IOC) bow to shareholder demands and repatriate funds back home to tap the United States’ shale boom.
Many large legacy fields in South-East Asia have also entered a period of decline, which means operators will have to pump in cash for less lucrative returns, prompting IOCs to rethink their presence in the region.
“The boards of these companies are having to justify their investments abroad. Some might say, ‘okay, I’m spread too thin’, which is what has led to the current consolidation,” Angell said.
Newfield International Holding Inc had last year hived off its Malaysian assets to SapuraKencana Petroleum Bhd for RM2.85bil. Murphy Oil Corp is mulling over the sale of a 30% interest in its operations here.
Tamarind Energy will seek to “collaborate, not compete” with the local special-purpose acquisition companies, whose business models mirror its own, and O&G producers like SapuraKencana or Petronas’ Vestigo, according to Angell.
Though conceding that negotiations for brownfield-type assets will be tough, Angell said he was less concerned about the initial entry cost than the potential upside.
Tamarind Energy will look at the “clever application” of technology to improve production from fields that are stranded.
Separately, Angell dismissed speculation that Tamarind Energy had tied up with Lundin Petroleum to develop two offshore blocks in Malaysia or partnered Shanghai-based Fosun International to acquire Australian O&G independent Roc Oil.