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Honghua commits USD 150m to Sino-Mex Energy Fund following energy sector reform

13th November 2014

The Chinese driller has, through a wholly-owned subsidiary, invested USD 150m into the Sino-Mex Energy Fund to participate and profit from onshore and offshore oil and gas infrastructure projects

Honghua commits USD 150m to Sino-Mex Energy Fund following energy sector reform
The fund will mainly invest in energy infrastructure projects and exploration and production of oil and natural gas in Mexico

“The gradual implementation of Mexico's energy reform will bring a wide range of investment opportunities and project opportunities,” Honghua Group said in a statement today.

“Both of the Chinese and Mexican governments have paid high attention to the Fund. The investment of Pemex in the fund through its subsidiary, and its cooperation with Chinese companies through the fund, are the implemental results of Mexico energy reform and Sino-Mexico cooperation in the field of energy.”

The total capital commitments of the fund is USD 5bn and the first phase will be USD 1bn, which will be increased as needed subject to the consent of each partner.

Honghua’s USD 150m investment represents 15 per cent of the initial USD 1bn investment phase.

The fund will mainly invest in energy infrastructure projects and exploration and production of oil and natural gas in Mexico.

Other members of the fund include P.M.I. Holdings B.V. (PMI), the offshore subsidiary of Petróleos Mexicanos (Pemex), and Xinxing Ductile Iron Pipes (Hong Kong) Limited, the wholly-owned subsidiary of Xinxing Ductile Iron Pipes Co., Ltd.

SPF Capital Lux S.à r.l acts as the General Partner and manages the fund.

The Sino-Mex Energy Fund will mainly invest in the business activities recommended by PMI and will focus on energy infrastructure projects (including but not limited to offshore and land drilling related facilities in the Gulf of Mexico, oil and gas pipelines throughout the territory of Mexico and LNG liquefaction plants), and the exploration and production of oil and natural gas (including but not limited to the redevelopment of mature oilfields in Mexico, exploration and exploitation of new oil fields and shale gas, etc.).

The term of the fund shall be 25 years, starting from the date of the establishment of the fund and subject to earlier termination of the Limited Partnership Agreement and liquidation of the fund under certain circumstances pursuant to the Limited Partnership Agreement.

The fund was founded on 20 October 2014.

Honghua Group is a large-scale equipment manufacturer and drilling service provider, specialising in research, design, manufacture, and set-assembly of drilling rigs, offshore engineering, and oil and gas exploitation and production equipment.

It is the biggest exporter of drilling rigs in China, and one of the largest land drilling rig manufacturers in the world.

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