Layoffs, dividend cuts, and budget reductions: We're tracking how 18 oil giants from Equinor to Exxon are responding to the historic oil price meltdownSmall or midsize private-equity firms that specialize in backing oil and gas companies are most vulnerable to the collapsing oil markets, several sources said.
"There could be some question whether limited partners ultimately produce capital when it's called upon," said Michael Freeman, a partner at Haynes and Boone. "It certainly makes it much harder on the road to raise capital." In a statement, Riverstone said it has expanded its investments over the past decade to areas outside of oil and gas, including renewable energy, such as wind, solar, and biomass, where "demand is very strong and accelerating.
According to a person familiar with the matter, the firm is in the market to raise a fund devoted to renewable-energy projects including energy storage, wind, and solar. "To an extent, private-equity firms have the ability to be patient," Freeman said. "You might just see them sit and try to wait things out a little bit."
But even the giants may decide to move away from oil and gas in the future or focus their investments in midstream or downstream companies — which transport, store, and refine oil — as they are more likely to survive a downturn, according to other attorneys.The upside for oil-and-gas private equity is that if these firms have money to spend they could see steep returns if they play their cards right.
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