| NAIROBI, June 17
NAIROBI, June 17 Private equity company Warburg
Pincus is leading an investment of up to $600 million in
Delonex Energy, a newly formed oil and gas exploration and
production company planning to tap into the central and east
African hydrocarbon boom.
The region has become hot property for energy investors
after gas discoveries in Mozambique and Tanzania, and other
hydrocarbon finds in Uganda and Kenya. However, progress towards
production, notably in Uganda, has taken years.
Delonex Energy, headed by former Cairn India CEO
Rahul Dhir, plans to target onshore regions and shallow coastal
waters rather than deep-water areas.
Its exploration region includes Ethiopia, Kenya, Uganda,
Tanzania, Mozambique, South Sudan and Chad.
The company, which was formally launched on Monday,
estimates that it will need $600 million for early exploration
and to establish whether finds are commercially viable, drawing
down cash as it is required, Dhir said from Addis Ababa.
"My guess is that this is a five-year type of time frame,"
he said of the timetable for using the cash. "With the right
opportunities, we can do it (with) less, we could do it faster."
Warburg Pincus, which has more than $40 billion in assets
under management, will lead the investment in Delonex and will
have one other partner, Dhir said, adding that it is still
working to identify and evaluate potential investors.
Dhir said that Delonex would seek "material stakes" in oil
or gas blocks. He did not give specific numbers, though such
stakes typically involve owning a third or more.
Dhir believes that the region is still under-explored and
pointed out that about 600 wells have been drilled in the
central and east African area, compared with more than 2,000 in
established African producer Gabon.