Browne set to stage stock market return

Former BP chief exec Lord Browne is about to float an offshoot of his private equity firm. Meanwhile, the Deepwater Horizon disaster continues to plague his old company.

by Emma Haslett
Last Updated: 24 Sep 2013

Lord Browne – best known as BP’s former chief executive and ‘the Sun King of the oil industry’ – is about to make his first foray onto the London Stock Exchange since he stepped down from the oil giant in 2007.

Riverstone Holdings, a private equity focusing (unsurprisingly) on investments into energy companies of which Browne is a partner, is planning to float Riverstone Energy.

The company is looking to raise between £670m and £1.5bn in the float. Browne said the company had already secured backing from five ‘cornerstone investors’ who will contribute £550m, including Alaskan sovereign wealth fund affiliate AKRC and Robert McNair, who owns the Houston Texans football team. It also includes KFI, a private investment vehicle owned by billionaire Louis Bacon.

In an industry where fracking and renewable energy are a la mode, at Riverstone Browne has preferred to keep things old school: in the summer, Riverstone spent $3.75bn (£2.5bn) on 2 million acres of oil and gas fields in the southern states of the US. The deal gave Riverstone control over 133 million barrels of oil and 636 billion cubic feet of gas.

Meanwhile, at his former company, things are less encouraging: BP has asked a US court to stop paying out compensation from its £5bn fund for victims of the Gulf of Mexico oil spill.

So far, BP has shelled out $42.4bn in charges, including fines and clean-up costs, but is continuing to pay compensation for victims. Now, the company is worried that it’s becoming a victim, too – of dodgy claims.

‘There is no assurance that dishonest and illegitimate claims are being detected and denied,’ said a spokesman. ‘Payment of such claims would cause BP irreparable injury.’

It’s hard not to feel sorry for BP, which has now been shelling out for claims for more than three years. But let’s not forget that 11 workers died in that disaster, and many more lost their livelihoods in the ensuing oil spill. Many would argue that the company is getting its comeuppance. We’re not sure BP’s senior management will see it that way…

- Keep an eye out for our exclusive interview with Lord Browne, in November's issue of MT.

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