A consortium of prominent City financiers and oil executives are pumping more than £65m into a well-decommissioning specialist in a bid to solve one of Britain’s most formidable industrial challenges.
Sky News has learnt that MW&< Capital Partners, a private investment vehicle launched last year, is to become a substantial shareholder in Well-Safe Solutions (WSS).
The new funding round, which also includes money from Tony Hayward, the former BP chief executive, will provide capital for WSS to accelerate the expansion of its innovative “plug and abandon” (P&A) approach to decommissioning redundant oil wells.
Research suggests that expenditure on oil industry decommissioning in the UK continental shelf during the 2020s is likely to exceed £15bn, of which just under half will be absorbed by the cost of making wells safe and removing them.
Established in 2017 by a trio of industry executives including Alasdair Locke, who made a fortune from the sale of Abbot, his oil and gas services business, WSS has also received funding from Scottish Enterprise.
Mr Locke’s other business successes include presiding over the growth of Motor Fuel Group, one of the UK’s largest petrol station operators.
WSS hopes to exploit the fact that the UK North Sea has approximately 5000 wells – of which 20% are subsea – which require decommissioning.
Taxpayers shoulder part of the cost of decommissioning activities, making it a significant burden on the public purse.
WSS says its approach to plugging and abandoning old wells is more cost-efficient and safer than conventional techniques, and wants to create 400 jobs during the next five years.
The company is understood to have secured a number of major P&A contracts, as well as generating significant revenues from its engineering business.
It has already made its maiden acquisition, which it has renamed the Well-Safe Guardian and is upgrading into a product which can be adapted across the oil industry.
Mark Patterson, one of WSS’s other co-founders and executive directors, is said to be stepping down following the transaction.
The involvement of MW&< as the lead investor in WSS’s fundraising marks one of its most prominent deals since it was established last year.
The vehicle’s founders included Julian Metherell and Matthew Westerman, both of whom had long careers as partners at Goldman Sachs, the Wall Street bank.
Its third founder, Peter Livanos, is the chairman of the international group Ceres Shipping and a member of one of Europe’s oldest shipping dynasties.
MW&< is understood to have invested in businesses across a range of sectors, including energy and renewables, shipping, financial services, consumer and retail.
The firm has positioned itself as a provider of flexible, long-term capital to growth companies, both in debt and equity, and as a majority or minority investor.
As part of the funding commitment to WSS, Mr Metherell is expected to join the company’s board.
After leaving Goldman, he helped to establish an investment vehicle with Mr Hayward that acquired Genel, an energy group with operations in Kurdistan.
MW&< and WSS declined to comment on Sunday.