Friday, July 30, 2010

Carlyle Group's "Quadrilla"

The Carlyle Group, a politically connected private equity underwriter (PEU), aims to double, triple, even quadruple its investment. Energy is a ripe sector for Carlyle. Two stories hit the wires.

First, Carlyle invested significant capital in Quorum Business Solutions, a a provider of software and systems to the oil, gas, and renewable energy industry.

Second, Cuadrilla Resources, a Carlyle/Riverstone affiliate seeks natural gas in Blackpool, England. Lord John Browne is Managing Director at Riverstone Holdings. He plans to transform domestic natural gas production as well as government services in the UK.

The United States went light on Browne for 15 deaths that occurred on his watch at BP's Texas City refinery. Rather than live up to his promise to make things right, Lord John skittered off to Riverstone Holdings, Carlyle's energy joint venture partner. Ironically, Carlyle connected James A. Baker, III conducted the inquiry into the BP blast. The first time Browne gave testimony on Texas City came three years after the deadly explosion.

Cuadrilla promises a safe operation. Similar to Lord Browne in the burned out wreckage of Texas City, CEO Chris Cornelius is adamant about it.

"I think there are certain cases in the US where certain operators have been documented as having some issues and they do exist. But I think we have done everything here working with the Health and Safety Executive and the Environmental Protection Agency here in the UK to ensure that doesn't happen on Cuadrilla's location."

I hope Cornelius has better luck and processes than Browne's BP. How far might they push the safety envelope in pursuit of a quadruple on Cuadrilla?