* Says Cara discovery could have upside potential
* Firm part of wave of private equity firms coming to Norway
* To focus on finds close to existing infrastructure
By Nerijus Adomaitis
OSLO, Feb 2 (Reuters) - The Cara oil discovery off Norway could start production by 2020 and may contain more hydrocarbons than currently estimated, Norwegian oil startup firm Pandion Energy, a partner in the licence, told Reuters on Friday.
The discovery in the North Sea, made last year by France's Engie, is estimated to hold between 25 and 75 million barrels of oil equivalent (mmboe) according to a preliminary estimate.
"It should be a fast-track subsea development with a tie in to the nearby Gjoea platform," Jan Christian Ellefsen, Pandion Energy's chief executive, said in an interview.
"We believe there is an upside (reserve) potential."
The other partners in the project are Japan's Idemitsu and Wellesley Petroleum, a Norwegian oil firm backed by private equity fund Bluewater Energy. The partners will have access to drilling and geology data that would underpin their optimism on reserves.
Private equity investors have been buying up assets in Norway's crisis-hit oil sector over the past year-and-a-half, betting on a recovery in crude prices and cutting deals with energy firms whose focus is elsewhere and are happy to generate some cash.
Pandion is part of that trend. Set up last year by former managers of Tullow Oil's Norwegian subsidiary, it announced this week that it had received $100 million from Hong Kong-based private equity fund Kerogen Capital.
Kerogen, led by two former J.P. Morgan bankers, said it could potentially increase investments to up to $300 million in Pandion Energy.
Pandion Energy has already agreed to buy interests in 10 licences offshore Norway, including a 20-percent stake in the production licence where the Cara discovery was made, bought from Tullow. Britain's Tullow is focusing away from Norway and more on its core exploration areas in Africa.
The deal is pending approval from the Norwegian oil and energy ministry.
Ellefsen said Pandion Energy was going to focus on appraising discoveries already made to boost their value or to explore in the areas located close to existing infrastructure to minimize the development costs.
"With some oil majors considering sale of their assets on the Norwegian continental shelf (NCS), we see good opportunities for oil startup companies like ours," he said.
"We will be active in the farm-in market." (Editing by Gwladys Fouche/Keith Weir)