First Reserve Corporation Agrees to Acquire Oil Storage Terminal

Greenwich, CT, Houston, TX and London, February 12, 2008 — First Reserve Corporation, the leading private equity firm that specializes in the energy industry, today announced that it has agreed to acquire the Bahamas Oil Refining Company (BORCO) oil storage terminal in Freeport, Bahamas. The acquisition will be financed in part by a senior secured credit facility fully underwritten by ABN AMRO Bank N.V..  Terms of the transaction were not disclosed.

BORCO is a 20 million barrel (over three million ton) independent storage terminal for crude oil, fuel oil and multiple petroleum products in Freeport, Bahamas, just 80 miles east of the coast of Florida.  In addition to storage, BORCO offers blending, transshipment and bunkering services.  BORCO is the largest storage terminal in the Caribbean, and its deepwater jetty facilities can berth the largest-sized vessels.  Chevron Corporation built the storage terminal in 1968 and sold the facility to Petróleos de Venezuela, S.A., or PDVSA, in 1990.   

The acquisition is part of an ongoing strategic effort by First Reserve to develop energy-related infrastructure businesses that will help build long-term growth opportunities with its partners, and is a continuation of its 25 year track record of developing long term sustainable businesses.  Companies in which First Reserve Funds currently have control or positions of significant influence have approximately US $13 billion of annual revenues and employ approximately 100,000 people.  Under the new ownership with First Reserve Corporation, BORCO is expected to become a key international hub for crude oil and petroleum products for major oil companies, and will be positioned as a best-in-class storage and trading platform for the region.

“BORCO will provide significant value for our strategic partners, including major oil companies, many of which are working with us to secure long-term storage contracts at the facility,” said Thomas J. Sikorski, Managing Director of First Reserve Corporation. “These partners will benefit from BORCO’s strategic geographic location and the facility’s scale and flexibility.  The addition of new capital that we plan to put in place is intended to optimize and upgrade the existing infrastructure in order to provide the highest quality standard of service for BORCO tenants. This significant capital also demonstrates First Reserve’s long-term commitment to the employees and will serve as a catalyst for increased development and production in the Bahamas.”

Added William E. Macaulay, Chairman and CEO of First Reserve Corporation, “We look forward to working together with the world’s major oil companies in supporting their own growth by providing long-term access to facilities for storage and distribution services in a strategic part of the world. We hope these important partnerships will lead to other areas of growth for us all.”

Merits of the Partnership

§  Strong Management Team and Employee Base: BORCO’s management team has extensive experience in the terminaling business and a track record of operational success.  In addition, BORCO has an experienced and proficient workforce, averaging over 20 years experience at BORCO, from which to grow the business into one of the world’s leading merchant storage terminals.

§  Strategic Geographic Location:  BORCO is located 80 miles off the coast of the U.S. and will serve as a strategic hub, allowing customers multiple delivery and service options while importing and exporting products to and from the region.  Also, the facility is located near markets with high growth potential and little or no refining capacity

§  Flexible Service Options:  BORCO offers customers multiple services to add value to their hydrocarbons, including blending and transshipping.  In addition, BORCO offers the region’s largest facility and deepwater jetties, providing customers the scale necessary for today’s global energy marketplace.

§  Capital Investment Plan:  BORCO will expand its storage capacity and jetty capabilities, as well as the breadth of its service options, through a capital investment plan intended to provide customers with additional value in the facility. 

The transaction is expected to close early in the second quarter of 2008 and is contingent upon the receipt of satisfactory regulatory approvals from the Government of the Bahamas.