Trader Vitol to invest in US oil and gas through new fund

Independent energy trader Vitol has launched a fund partnership with an energy-focused asset manager to provide financing to the upstream oil and gas sector in North America.

Valor Upstream Credit Partners (VCP) is a fund launched by Vitol, the world’s largest independent oil trader led by chief executive Russell Hardy, and financial partner Riverstone Credit Partners of international asset manager Riverstone Holding LLC.

Through the fund, Vitol will “seek to make structured credit investments” in upstream oil and gas companies in North America, the company said on Thursday.

“We see a tremendous opportunity to support companies in the upstream sector via private credit,” said Ben Marshall, Vitol head of Americas.

The focus of the investment vehicle, which will be managed by Riverstone, will include debt refinancing, funding for acquisitions and the providing of development capital to companies.

Riverstone Credit Partner’s co-heads, Christopher Abbate and Jamie Brodsky, said the asset manager has a history of providing more than $1 billion in capital to the North American upstream oil and gas sector. The company has seen a new opportunity to expand its role as a creditor in this space as operators’ traditional avenues to raise capital have been reducing.

Article continues below the advert

“As traditional capital providers continue to exit the space, we see tremendous opportunities to partner with operators in growing critical energy resources,” Abbate and Brodsky said.

Last month, France’s BNP Paribas, historically one of the most ardent financiers of the commodities industry, announced it would no longer provide credit to new oil and gas projects, as part of a strategy to wind down its exposure to hydrocarbons and align with net zero climate targets.

Other banks, including Dutch lender ING, have announced similar plans.

In April, the Net Zero Asset Owner Alliance (NZAOA), a group of international institutional investors which control a total of $11 trillion in assets under management, reviewed its guidelines to members, requiring them to stop direct investment in new upstream oil and gas projects.

It stated that investors should not finance greenfield upstream oil projects beyond those already committed to by the end of 2021, and limit investment to existing natural gas projects.