Latest News | Tullow-Capricorn Merger: Rahul Dhir at Helm of Group He Started Oil, Gas Journey with

New Delhi, Jun 1 (PTI) India-born investment banker-turned oil executive Rahul Dhir will be at the helm of the group with which he started his oil and gas sector journey after UK-based Tullow Oil and Capricorn Energy agreed to merge into a single London-listed African powerhouse.

Dhir, 56, who helped Edinburgh-based Cairn Energy plc list its Indian arm in 2016, will be the chief executive officer (CEO) of the entity that will result from the merger, the two firms said on Wednesday.

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Cairn Energy is now known as Capricorn Energy.

Under the deal, Capricorn shareholders would receive 3.81 Tullow shares for each of their shares, the two firms said. Capricorn shareholders will own 47 per cent of the combined company and Tullow shareholders 53 per cent.

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Tullow's chair Phuthuma Nhleko would head the combined group, while Tullow CEO Dhir would be CEO. Capricorn chair Nicoletta Giadrossi would be the senior independent director and CFO James Smith would be the CFO of the combined entity.

Capricorn CEO Simon Thomson will step down and chair the committee overseeing the integration of the two companies.

The board would have five non-executive directors, made up of two Tullow directors and three from Capricorn, they said.

Educated at IIT Delhi (BTech), University of Texas (MSc) and the Wharton School (MBA), Dhir started his career as a petroleum engineer before moving into investment banking where he led teams at Morgan Stanley and Merril Lynch.

On March 15, 2006, he was making one of his regular presentations as a top-notch investment banker at Merrill Lynch to his client, Edinburgh-based Cairn Energy Plc.

At the end of the presentation that made a strong case for an initial public offer (IPO) of the India unit of Cairn, which had discovered the country's biggest onland oilfield in Rajasthan, the company's then chief executive Bill Gammel took him aside and asked if he would like to put his words into action and take charge of the destiny of Cairn India.

On April 20, 2006, Cairn Energy announced his appointment as CEO of the new Indian business, which was aiming to list through an IPO in the last quarter of 2006 or early 2007.

Under his leadership, Cairn India successfully completed a USD 2 billion IPO and grew to a market value of nearly USD 13 billion. Rajasthan fields started production, reaching over 200,000 barrels of oil equivalent per day, according to his bio on the Tullow website.

Cairn Energy sold its majority stake in Cairn India to mining mogul Anil Agarwal's Vedanta. He oversaw the handover and quit in 2012 to set up Delonex Energy, an Africa-focused oil and gas company.

However, his entrepreneurial venture was not as successful as Cairn India and he joined Tullow Oil plc in April 2020 as CEO.

The Tullow-Capricorn merger will bring Dhir back to work with people he was associated with more than a decade back. Thomson, for instance, was Cairn Energy's representative on IPO roadshows that Dhir led in 2006.

Officials said Capricorn and Tullow have a lot of executives with a common pedigree.

For instance, Mike Walsh, the general counsel at Tullow Oil, was legal head at Cairn India Ltd between June 2007 and October 2013.

The merger will create an Africa-focused but London-listed oil and gas specialist with a market value of more than 1.4 billion pounds.

The two companies said they believed the deal would create a "stronger, more resilient" African energy company that would be able to deliver sustainable shareholder returns.

The combined entity will have 1 billion barrels of resources spread across countries including Ghana, Egypt and Gabon.

Production in 2021 of 96,000 barrels of oil and oil equivalent gas per day would make it one of the largest listed African exploration and production companies. The aim would be to reach 120,000 boepd by 2025.

The deal is subject to shareholder approval.

Currently, the companies exist in a capital-constrained world, Dhir said on a conference call. The combination would open up new opportunities, he added.

"The Boards of Tullow and Capricorn believe the combination has a compelling strategic, operational and financial rationale, with the ability to deliver substantial benefits to shareholders, host nations and other stakeholders," they said in a statement.

"The combination represents a unique opportunity to create a leading African energy company, listed in London, with the financial flexibility and human resource capability to access and accelerate near-term organic growth, add new reserves and resources cost-effectively, generate significant future returns for shareholders, and pursue further consolidation."

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