GPs show healthy appetite for "black gold"

The oil sector has seen an increase in private equity sponsorship of late. Historically, the segment has been supported by specialist funds; however, with the high oil prices, more generalist funds are also keen to secure deals here.

The value of downstream deals more than doubled from $3.7bn in 2006 to $8.4bn in 2007, according to PricewaterhouseCoopers. Private equity is a big part of this, with three of the ten largest deals last year containing private equity financing. In addition, according to research by Private Equity Insight, two of the three largest ever deals in the sector were completed in 2008.

"We have definitely seen a stronger appetite for the oil & gas sector, in particular the oil field services & equipment sector, among generalists," says Lars Saunes, director of Simmons & Company.

So, even in a post-credit crunch environment, the sector stands out and activity is booming. (Page 16).

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