Meet the US Investors Linked to Koch and Tobacco Making a Play for UK Fracking Firm IGas

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The Americans are coming, and theyโ€™re planting their flags on UK oil fields whether the Brits like it orย not.

Famously aggressive US private equity firm Kohlberg Kravis Roberts (KKR) is launching a bid to gain control over UK fossil fuel company IGas, against the boardโ€™s wishes, the Telegraph reports.

IGas has been at the forefront of recent efforts to establish a somewhat stumbling shale gas industry in the UK, despite government support. It has around 1 million acres of licences to frack for shale gas and exploit coal bed methane in Lancashire and the Northย West.

What is KKR?

KKR shot to fame in the late 1980s for their part in the largest ever buyout in history at the time, when food and tobacco company RJR Nabisco was purchased for $31ย billion.

The deal inspired a film, โ€˜Barbarians at the Gateโ€™, reflecting on the company’s strategy of leveraging large amounts of debt to force dealsย through.

Since dabbling in the tobacco industry, KKR has diversified its portfolio and increasingly looks for opportunities in the oil and gasย sector.

KKRโ€™s mooted bid for IGas comes just six weeks after it took control of another UK oil and gas company, Expro International Group which operates and maintains wells in the Northย Sea.

And it already has assets in the US. Just yesterday, an Alabama pipeline part-owned by KKR had a major explosion, killing one person and injuring five others, according to reports by Bloomberg.

The other major owners of that pipeline include Koch Industries and Royal Dutch Shell. Both companies have famously lobbied against climate changeย regulation.

Score toย Settle?

Closer to home, thereโ€™s also a potential conflictย brewing.

KKR has tasked a different company, Trans European Oil & Gas (TEOG), to actually make the IGas deal happen. On TEOGโ€™s board are three directors who certainly know IGasย well.

In 2011, IGas bought the UKโ€™s second largest onshore oil and gas group, Star Energy, which in turn was owned byย Petronas.

On Star Energyโ€™s board were Roland Wessel, Colin Judd, and Melvyn Horgan โ€“ all now directors of TEOG. All three left Star Energy shortly after the IGasย takeover.

So the US company looks set to make its play, using those with existing knowledge of the UKโ€™s fossil fuel industry as aย foil.

The question is, what happensย next?

Photo: Main image โ€“ย World Economic Forum via Wikimedia Commonsย CCBYSA 2.0 | K2 Space via Flickr CCย 2.0

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Mat was DeSmog's Special Projects and Investigations Editor, and Operations Director of DeSmog UK Ltd. He was DeSmog UKโ€™s Editor from October 2017 to March 2021, having previously been an editor at Nature Climate Change and analyst at Carbon Brief.

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