First Reserve Forms Strategic Partnership with Hainan Zhenghe Industrial Group

News provided by

May 30, 2014, 09:20 ET

GREENWICH, Conn., HOUSTON, LONDON and HONG KONG, May 30, 2014 /PRNewswire/ -- First Reserve, the largest global private equity firm exclusively focused on energy, today announced that First Reserve Fund XIII had entered into a strategic cooperation with Hainan Zhenghe Industrial Group Company Limited ("Zhenghe"). The parties plan to pursue oil and gas investment opportunities in China and Central Asia. In addition, Zhenghe will act as a potential source of capital in support of First Reserve's participation in North American oil and gas upstream projects and will invest as a Limited Partner in First Reserve Fund XIII. Zhenghe is a publicly listed company in China and focused on oil and gas exploration and production operations. Financial terms of the agreement were not disclosed.

Zhenghe is the largest independent oil and gas exploration and production company by market value on the 'A' share Market, with an established investment portfolio and business network in China and Central Asia. Zhenghe has an experienced team of professionals in both management and technical areas and robust relationships with many research institutions and engineering vendors in China.

The two organizations will advise and support each other on upstream transaction strategies and financing, and will share research on upstream projects. Alex Krueger, President of First Reserve, commented, "We recognize and value Zhenghe's role as an important oil and gas investor in China and Central Asia and are delighted to have formed this partnership. We look forward to the strategic enhancement Zhenghe will provide to the execution of First Reserve's business model and the proliferation of our already diverse portfolio in upstream oil and gas."

Joe Ning, CEO of Zhenghe, commented, "We are very pleased to establish a strategic partnership with First Reserve. Zhenghe is committed to expand its exploration and production interests into North America and other continents and we believe that the cooperation between Zhenghe and First Reserve will create strategic and financial synergies in multiple aspects."

About First Reserve

First Reserve is the largest global private equity firm exclusively focused on energy. With over 30 years of industry insight, investment expertise and operational excellence, the Firm has cultivated an enduring network of global relationships and raised more than USD $26 billion of aggregate capital since inception. Putting these to work, First Reserve has completed more than 475 transactions (including platform investments and add-on acquisitions) on six continents. Its portfolio companies operate in approximately 50 countries and span the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure. First Reserve has offices in Greenwich, CT; Houston, TX; London, U.K. and Hong Kong. Visit us at www.firstreserve.com for more information.

About Zhenghe

Zhenghe is the largest independent oil and gas exploration and production company by market value in China.

Zhenghe's recent $525MM acquisition of 95% interest in Maten Petroleum was recently approved by the Kazakhstan government. Maten has three producing blocks with 305MMboe STOIIP (Stock Tank Oil Initially In Place), 73MMboe 2P reserves and 2012 daily production of 12,600 boepd in Caspian Basin, one of the internationally recognized oil & gas resource-rich but under-developed basins.

SOURCE First Reserve