Petrofac, First Reserve in $1.25bn JV

Private equity tie-up: For Ayman Asfari-led Petrofac with First Reserve

Petrofac has teamed up with energy-focused private equity player First Reserve to create a $1.25 billion infrastructure investment joint venture.

PetroFirst Infrastructure Partners will be 80% owned by First Reserve, with oilfield services giant Petrofac holding the balance.

First Reserve is expected to chip in up to $1 billion to the joint venture with Petrofac contributing as much as $250 million.

“The gross investment capacity of the new venture is expected to be significantly increased through debt leverage available to infrastructure investments,” Petrofac said on Thursday.

An initial transaction under the framework agreement is to see First Reserve buying 80% of Petrofac’s floating production assets from its integrated energy services (IES) wing for around $450 million.

This entails a trio of floating production, storage and offloading units: FPSO Berantai, FPF3 (formerly Jasmine Venture) and FPF5 (formerly Ocean Legend).

The $450 million sum comprises cash and the assumption of around $130 million in existing project finance for the FPSO Berantai.

Petrofac will retain a put option to repurchase one or more of the units for amounts of between $39 million and $105 million.

“Management believes that the repurchase consideration accurately reflects the forecast residual values of the floating production facilities at the times when the put options would vest,” Petrofac said.

Some of the up to $1.25 billion kitty will be used invest in “new energy infrastructure projects that utilise Petrofac's development capability”, the company added.

IES chief operating officer Rob Jewkes said: "We are seeing a clear shift in the industry to contracted and shared infrastructure models and this initiative will facilitate our ability to support our clients with this offering."

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