Commodity trader Gunvor sets up shop in Texas

Gunvor is to open an office in the US as the commodity trader continues to move away from its Russian roots and re-orientate its business.

Backed by a $500m credit facility from a group of European banks, Gunvor’s Houston office will start trading refined products such as gasoline as well as natural gas, asphalt and bitumen, reports Neil Hume in London.

The decision to establish a business in the US comes after the Geneva-based company, which is one of the world’s biggest oil traders, severed its ties to a former Russian business partner who is the subject of sanctions.

In May, the Financial Times revealed Gunvor’s chief executive Torbjörn Törnqvist had used a special dividend of $1bn to settle a debt owed to Gennady Timchenko, an oligarch with close links to the Kremlin.

Mr Timchenko, who co-founded Gunvor with Mr Törnqvist, was placed on a sanctions list by the US in March 2014 because of his ties to Russian president Vladimir Putin.

The Houston office marks the latest step by Gunvor to diversify its business, which has stepped up its trading activities in regions including Africa and Asia while at the same time selling assets in Russia.

Gunvor once had a market-leading position, handling about one-third of the country’s seaborne exports and reinvesting the proceeds.

While US banks are yet to join the new $500m credit facility, which was arranged by Rabobank and ABN Amro and will be secured against inventories of oil and petroleum products, the Bank of Texas will process payments for the Houston operation.

Gunvor reported record profits of $1.25bn last year, boosted by the sale of assets in Russia, including a majority stake in its once-prized Russian oil terminal and favourable market conditions caused by the oil price crash.

Over the past year, the company has opened an oil storage terminal in Indonesia and struck a deal to buy a refinery in Rotterdam from Kuwait’s national oil company.

Rival trading houses such as Mercuria, Trafigura and Vitol has also been expanding their US operations as they look to profit by connecting their global network of customers to the oil flows unleashed by the US shale boom.

In recent months Mercuria, the Swiss energy trader, has struck a series of deals with pipeline companies and oil producers in North America as it looks to become a major exporter of US crude.


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