* Says Cara discovery could have upside potential
* Firm part of wave of private equity firms coming to Norway
* To focus on finds close to existing infrastructure
By Nerijus Adomaitis
OSLO, Feb 2 The Cara oil discovery off Norway
could start production by 2020 and may contain more hydrocarbons
than currently estimated, Norwegian oil startup firm Pandion
Energy, a partner in the licence, told Reuters on Friday.
The discovery in the North Sea, made last year by France's
Engie, is estimated to hold between 25 and 75 million
barrels of oil equivalent (mmboe) according to a preliminary
"It should be a fast-track subsea development with a tie in
to the nearby Gjoea platform," Jan Christian Ellefsen, Pandion
Energy's chief executive, said in an interview.
"We believe there is an upside (reserve) potential."
The other partners in the project are Japan's Idemitsu
and Wellesley Petroleum, a Norwegian oil firm backed by
private equity fund Bluewater Energy. The partners will have
access to drilling and geology data that would underpin their
optimism on reserves.
Private equity investors have been buying up assets in
Norway's crisis-hit oil sector over the past year-and-a-half,
betting on a recovery in crude prices and cutting deals with
energy firms whose focus is elsewhere and are happy to generate
Pandion is part of that trend. Set up last year by former
managers of Tullow Oil's Norwegian subsidiary, it
announced this week that it had received $100 million from Hong
Kong-based private equity fund Kerogen Capital.
Kerogen, led by two former J.P. Morgan bankers, said it
could potentially increase investments to up to $300 million in
Pandion Energy has already agreed to buy interests in 10
licences offshore Norway, including a 20-percent stake in the
production licence where the Cara discovery was made, bought
from Tullow. Britain's Tullow is focusing away from Norway and
more on its core exploration areas in Africa.
The deal is pending approval from the Norwegian oil and
Ellefsen said Pandion Energy was going to focus on
appraising discoveries already made to boost their value or to
explore in the areas located close to existing infrastructure to
minimize the development costs.
"With some oil majors considering sale of their assets on
the Norwegian continental shelf (NCS), we see good opportunities
for oil startup companies like ours," he said.
"We will be active in the farm-in market."
(Editing by Gwladys Fouche/Keith Weir)