Razon’s Colombia play a ‘huge buffer’ in fuel crisis
The Razon Group’s buyout of a major oil and gas firm in Colombia is seen to calm the Philippines’ supply woes, particularly highlighted during persistent unrest in the Middle East, analysts said.
Logistics tycoon Enrique Razon Jr., through Prime Infrastructure Capital Inc. (Prime Infra), is set to take the reins of SierraCol Energy Ltd., Colombia’s largest independent oil and gas exploration and production company.
Global investment company Carlyle recently agreed to sell its entire stake in SierraCol.
“This acquisition strengthens our oil and gas expertise and complements our existing asset base in the Philippines,” said Guillaume Lucci, president and CEO of Prime Infra.
“Together, these capabilities position us to operate across the oil and gas value chain … and to participate in the sector’s growth against the backdrop of a broader commodities supercycle,” Lucci said.
Closing in April
Prime Infra has investments in water, energy and waste management.
The value of the transaction was not disclosed, but a report from Reuters stated that Carlyle sought about $1.5 billion. It is expected to close in April.
Marky Carunungan, an investment analyst at F. Yap Securities, said the deal cements the group “as a more integrated regional energy player.”
For Peter Garnace, equity research analyst at Unicapital Securities Inc., the takeover “is timely and strategically attractive both commercially and geopolitically for Philippine energy security.”
Prime Infra stands to immediately cash in on production-ready oilfields, reserves and pipeline access, especially with its logistics facility in Colombia, called Puerto Aguadulce.
“Producing high-quality and low-cost oil given its proximity to processing, storage and transportation infrastructure, SierraCol is a structurally advantaged operation yielding to industry-leading profitability,” Garnace said on Thursday.
The analyst said that with Prime Infra getting a hold of SierraCol, the Philippines might “significantly reduce” its reliance on oil-producing countries in the Middle East, which have been facing bombing attacks amid a war between the United States and Israel, and Iran.
