3i to invest $ 700-800 mln/year in Asia, focus on oil

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SINGAPORE, Oct 31 (Reuters) British private equity firm 3i Group Plc plans to invest 0-800 million annually in Asia over the next few years, with a large part set aside for the booming oil and gas sector, company officials said on Wednesday.

''For the first time in history, we have a demand-led shock in oil,'' said 3i director Mark Sibson at a briefing in Singapore.

''The world doesn't have the capacity to deal with demand.'' 3i will invest not just in exploration and production companies, but also in firms that provide equipment and services to the energy sector, he said. The planned investments are another sign that mid-sized private equity deals are weathering the global credit market squeeze.

Demand for oil, which hit a record price of over a barrel earlier this week, has increased in recent years because of growing demand from fast-growing emerging economies such as China and countries in the Middle East. The boom has in turn sparked a rise in spending on exploration equipment and related services as companies search for new oil deposits.

3i earlier this year invested an undisclosed sum in Franklin Offshore, a Singapore-based company that provides lifting, mooring and marine equipment to energy and marine companies.

Franklin has performed better than expected, and 3i may list the company on the Singapore Exchange and exit its investment ahead of the usual two to three years gestation period, said 3i associate Monish Mansukhani.

3i's other energy-related investments in Asia were exploration company Pearl Energy, which listed in Singapore in April 2005 and was acquired by Abu Dhabi-based Aabar Petroleum in January 2006, and exploration and production firm Salamander Energy , which listed in London last year.

The UK private equity firm has sold its stake in Pearl but remains a shareholder in Salamander, Sibson said.


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