Energy Capital Group (ECG), a private global investment firm, has set up a $300 million investment vehicle to target investments in small to medium sized companies in the Middle East region.

ECG, which has offices in Bahrain, Dubai and London, aims to capitalise on the growth of energy services sector in the Mena region. The firm has a targeted first close of $200 million in committed capital in the second quarter of 2011.

ECG on Sunday unveiled its plans to pursue further investments in the global energy services sector in order to capitalise on growth in global energy demand and the resulting need for significantly raised levels of production and added capacity, much of which will come from the Mena region.

The firm, which was established in 2008, has already completed over $100 million of investments in global and Middle East energy services companies. These investments have been made in the blue-chip regional and global financial institutions as well as individual investors and family groups.

Ali Abdulaziz AlTurki, founding partner and CEO of Energy Capital Group, said,'The outlook for the energy services sector and in particular that the Mena region remains strong and ECG offers investors a unique opportunity to capitalise on expected growth and potential for significant long-term capital appreciation.'

Depletion rates are resulting in a major supply and demand imbalance in the oil & gas industry and, at current rates new oil capacity equivalent to three to four times Saudi Arabia’s current production rate must be added by 2020 in order to meet global demand, he stated.

Based on strong interest and market demand from the investors, ECG is now moving forward with plans having established a $300 million investment vehicle with a targeted first close of $200 million in committed capital in the second quarter of 2011, AlTurki noted.

'The investment vehicle will pursue global opportunities with a primary focus on identifying investments among ECG’s network of over 250 international partners that are known to its management and shareholders and which operate in the energy and related energy services sector.'

According to him, the firm is targeting investments in small to medium sized companies that are well managed, have solid track records and strong performance and growth potential.

'Of particular interest to ECG are global companies currently generating a small percentage of their total revenue from the Middle East but which have strong near-term opportunities to significantly grow their ME revenues and where ECG’s unmatched regional expertise, network and strong shareholder base can help the investing firms access a potentially large and lucrative pool of contracts available in the region and in particular in the GCC markets,' said AlTurki.

Among ECG’s investors are some of the Middle East’s largest energy and industrial investment groups such as Rawabi Holding Company, Atco, Al Muhaidib Group and Al-Ansari Holding Company.

'With much of this added capability expected to come from the Mena region, there are extensive opportunities for the drilling, oilfield services, construction, maintenance services and equipment providers in which ECG invests and with whom we are committed to working to unlock value and open doors to new high growth markets especially in the Middle East,' he remarked.

AlTurki said this was the right time to raise and deploy capital. 'Both the economic and oil cycle are near the bottom, resulting in reduced equity values and significant room for upside potential,' he noted.

'Furthermore, the challenging financial environment of recent years and the resulting constraints on bank lending have created a time of unique opportunity for private equity investments into thriving businesses that require capital to meet their growth potential.'

'We have identified a strong pipeline of such opportunities and are currently evaluating a number of potential transactions involving promising global and regional energy services providers,' he added.-TradeArabia News Service