LONDON - The alternative investment giant Blackstone Group announced a partnership on Tuesday with the oil producer LLOG Exploration to invest a combined $1.2 billion in offshore energy assets in the Gulf of Mexico.
The deal is the latest in a flurry of announcements by private equity firms, which are looking to capitalize on the booming energy sector in the United States.
Under the terms of the deal, Blackstone will form a strategic partnership with LLOG Exploration, an energy company based in Covington, La., with assets across the Gulf of Mexico.
The two companies will initially invest a combined $1.2 billion in the partnership to develop LLOG Exploration's existing energy assets, including a number of recent deepwater discoveries, in the region. The amount that each firm would invest was not disclosed.
Blackstone and LLOG Exploration said the cash may also be used to expand the energy company's resources in the Gulf of Mexico, including through a cquisitions.
“We are very excited to form this long-term partnership with LLOG to accelerate the growth and development of LLOG's attractive and extensive portfolio of discoveries and prospects,†Angelo Acconcia, managing director of Blackstone Energy Partners' oil and gas unit, said in a statement.
The privately owned LLOG Exploration is one of the largest oil and gas companies currently operating in the Gulf of Mexico.
Over recent years, several private equity firms have invested in the U.S. energy sector as new drilling technology, such as hydraulic fracturing, or fracking, has opened up new areas for oil and gas exploration.
Earlier this year, a consortium led by Apollo Global Management bought the exploration and production business of the El Paso Corporation for about $7.2 billion. The deal was part of concessions that Kinder Morgan agreed to as part of its $21.1 billion deal to buy El Paso.
