Infrastructure

Gulf Capital invests in Amak Petroleum

Egypt-based integrated petroleum services provider gets $25m fund infusion from Abu Dhabi-based Gulf Capital

(L-R) Ayman Abbas, founder of AMAK and Walid Cherif, Managing Director, Gulf Credit Partners

Private equity firm Gulf Capital has made a 25m investment in Amak Group through its regional Fund, Gulf Credit Partners. Amak is a leading provider of integrated petroleum services for the onshore and offshore sectors in Egypt, and offers drilling and work-over services to national and multinational oil companies.

Gulf Credit Partners is the credit and mezzanine business of Gulf Capital which provides financing and growth capital to fast growing companies in the Middle East, North Africa and Turkey (MENAT).

Dr Karim El Solh, Chief Executive Officer of Gulf Capital, said: “Gulf Credit Partners’ investment will help Amak continue its strong growth at an exciting time for Egypt’s revitalised oil & gas sector. Amak’s strong position in the Egyptian oil and gas service sector, as well as its ambitious growth strategy and experienced management team, are strongly aligned with our Fund’s investment strategy.”

Under-investment in Egypt’s upstream segment over the last three years has held back growth and seen domestic consumption catch up with production. Oil demand is expected to increase from 34.8m tonnes oil equivalent (toe) in 2013 to 45.5m toe in 2020. Over the same period, it is estimated that shortage of hydrocarbons in Egypt will grow from 657000 barrels oil equivalent (boe) per year to 28.2m boe/year.

An improving outlook with regards to political stability in Egypt has improved investor sentiment and encouraged investment in the country’s oil & gas sector. In its attempt to bridge the supply-demand imbalance, the Egyptian government has taken steps to attract further investment to this strategic sector. In particular, the government has reached an agreement with foreign oil firms to pay off all of its arrears by 2017.

This strategy already appears to be paying dividends, with the latest auction of 22 oil & gas exploration concessions drawing substantial interest from international oil multinationals. Amak, as a leader in integrated petroleum services in Egypt, is ideally positioned to benefit from the recovery and growth in the Egyptian upstream oil and gas sector.

Ayman Abbas, founder of Amak, said: “This institutional investment from Gulf Capital will strengthen Amak’s capital structure, allow us to fund the rapid growth of the Company and help improve overall corporate governance, all vital components to the continued success of Amak. We are glad to partner with such a leading alternative asset manager in order to achieve our ambitious growth plans.”

Walid Cherif, Managing Director of Gulf Credit Partners stated: “We are delighted to team up with Amak, which has achieved significant growth over the last years to become a main player in upstream oil & gas services in Egypt. We are also thrilled with this seventh investment of the Fund and its success in deploying over 70% of its capital in thriving and fast growing businesses. Our investment in Amak represents a new milestone for the Fund as we further diversify our portfolio by geography and industries. Gulf Credit Partners is today invested in some of the fastest growing and most defensive industries across the region, including healthcare, education, power and oil and gas services.”

Dr Mohamed Farouk, Chairman and CEO of Amak said: “Gulf Capital has shown great flexibility in tailoring a unique financing solution that meets our strategic growth needs. This institutional investment will assist Amak in achieving its target of becoming the leading provider of integrated oil & gas services in Egypt.”

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