Macquarie calls in Grant King in play for Eni’s Australian energy assets

Macquarie Group and its partners are understood to have called on the services of the seasoned oil and gas veteran Grant King to make a play for Eni’s Australian energy assets.

The former Origin Energy boss and Business Council of Australia president will come in handy in understanding what is an eclectic mix of assets that range from gas fields to gas-related infrastructure and require solid industry expertise.

It is not the first time that a bidder for a business has tapped a seasoned industry executive — Bain Capital has drawn in former Jetstar boss Jayne Hrdlicka as part of its pursuit of Virgin Australia, as revealed by DataRoom on April 23.

While it is unclear exactly in what capacity Mr King could be working with Macquarie on for the Eni play, dubbed Project Ocean, some expect he could become chairman of its venture should it snap up the assets.

The part of Macquarie Group that is keen on the Eni portfolio, which is up for sale through Citi for a price expected to be between $500m and $1bn, is believed to be the same unit that had planned to compete for Exxon’s Bass Strait assets, worth more than $3bn, as first flagged by DataRoom on December 18.

That Exxon sales process was expected to start in July but is now widely expected to be on hold following a collapse in the oil price due to COVID-19.

It apparently has an impressive line-up of investors in tow and is headed by husband and wife team Robert Dunlop, who is chairman of the bank’s global resources group, and Kate Vidgen, who is a Macquarie executive director specialising in energy.

 

Macquarie made a windfall in November 2018 when it offloaded its Quadrant Energy business to Santos for $2.15bn.

This was after buying Quadrant in 2016 from Apache Corporation for $US2.1bn ($3bn), including debt, before selling off parts of the business to other investors, including Wesfarmers.

Macquarie had owned 36.3 per cent of the WA oil and gas company, while Brookfield Asset Management had 48 per cent and Wesfarmers 13.7 per cent and management the remainder.

According to a flyer obtained by DataRoom, on offer by Eni is a 10.99 per cent stake in Darwin LNG and also the Bayu-Undan gas field project to which it is linked. Darwin LNG is described as “a world-class conventional gas project” and market experts estimate it is worth about $250m.

Also for sale is the Blacktip gas field project and the Yelcherr gas plant that is linked to the project, expected to be worth up to $500m, and a 72.2 per cent interest in the Evans Shoal and Barossa gas field project off the coast of Darwin.

Macquarie will likely join Roc Oil, owned by China’s Fosun in lining up for Eni’s Blacktip, and while Beach Energy may take a look, the expectation is it will not be a final contender as it has long considered the Australian market as non-core.