Warburg Pincus to lead $600M investment in Africa-focused oil & gas firm floated by Rahul Dhir

Private equity major Warburg Pincus is leading an investment of up to $600 million in Africa-focused oil & gas explorer Delonex Energy, led by Rahul Dhir, former chief of Cairn India, as per a company statement. But the firm has not disclosed if there are other investors in the venture or named them. Delonex is headquartered in London, with subsidiaries in the UK, India and Kenya.

Delonex Energy is a new energy exploration and production company focused on central and east Africa. It seeks to unlock the hydrocarbon potential of the countries where it operates. The company’s key strategic areas include the East African Continental Rift System, which extends from the Red Sea through to Ethiopia, Kenya, Uganda, Tanzania and Mozambique; the Central African Rift System from Chad to South Sudan and the coastal margins of East Africa.

The company is led by CEO Rahul Dhir, executive director David Ginger (executive director, exploration and subsurface, who previously led Cairn India’s exploration efforts in the Indian sub-continent) and CFO Ajay Gupta besides the operational team.

Dhir led Cairn India from its inception through to its $2 billion IPO and ultimate sale to Vedanta Resources plc. Till recently, he was also an executive-in-residence at Warburg Pincus and he worked in close collaboration with the firm over the past few months to formulate Delonex’s business plan.

“There is significant, underexplored resource potential in central and east Africa, and our team has the experience, technology and capital to unlock these hydrocarbon resources and create value for our host governments,” said Dhir.

Prior to joining Cairn India, Dhir was the co-head of energy and power investment banking at Merrill Lynch (London) where he provided strategic and financing advice to energy clients in Europe, the Middle East and Africa. He joined Merrill Lynch from Morgan Stanley in London where he focused on providing M&A and financing advice to energy clients in Europe. An IIT Delhi graduate who went on to grab an MBA degree from Wharton in 1994, Dhir also worked for the M&A team at SBC Warburg (in New York and London).

“The Delonex team has pioneered innovative applications of technology and brings a strong focus on disciplined execution and low-cost operations. Along with their knowledge of Africa and a successful track record in similar basins around the world, we believe this team is well positioned for exploration success in Africa. We look forward to supporting the company as it seeks new opportunities in this important part of the world,” said Somit Varma, managing director of Warburg Pincus.

Warburg Pincus, which has $40 billion in assets under management with active portfolio of more than 125 companies, has provided over $6 billion of equity for companies around the world – firms which are involved in oil and gas exploration and production, midstream, power generation, oilfield technology & related services and alternative energy development. It has been the lead investor in several dozen energy companies including Antero Resources, Bill Barrett Corporation, Encore Acquisition Company, ElectroMagnetic GeoServices, Kosmos Energy, Laredo Petroleum, MEG Energy, Newfield Exploration, Spinnaker Exploration, Targa Resources and Venari Resources.

(Edited by Sanghamitra Mandal)

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