Trafigura May Focus on Products in Russia
Switzerland-based trading firm Trafigura is moving to expand its oil business in Russia
London, 6 September (Argus) — Switzerland-based trading firm Trafigura is moving to expand its oil business in Russia, yesterday announcing the establishment in Moscow of a company headed by former TNK-BP vice-president and head of trading Jonathan Kollek and his deputy Elena Lobodina.
Trafigura has four crude traders in Moscow including Dmitry Kuranov, who headed TNK-BP's crude exports in the past, and Boris Galkin who was a senior domestic crude trader. The firm also has four traders dealing with oil products and the products segment is the more promising for the company in Russia.
Prior to state-owned Rosneft's takeover of TNK-BP earlier this year, the core Trafigura oil business in Russia centred on contracts with TNK-BP, since terminated by Rosneft. Trafigura used to lift Urals, CPC Blend and Siberian Light from TNK-BP but all those shipments have ceased.
But in June Trafigura signed a term deal with Rosneft to supply up to 40,000b/d of crude and products for five years with a $1.5bn pre-payment. In December last year, Rosneft agreed five-year term deals with trading firms Glencore and Vitol.
Trafigura is expected to start lifting at least one 100,000t Urals cargo each month from Rosneft from Baltic ports from October this year under the pre-finance deal. The firm is also expected to appear among Rosneft's six-month crude tender for Urals and CPC Blend for delivery between October 2013 and March 2014, the results of which will be announced on 9 September.
But the Russian crude markets are dominated by Vitol, Glencore, and Shell and market participants say that Trafigura has bigger opportunities in Russia's products markets. It currently supplies LPG from Baltic ports, naphtha via Black Sea terminals and middle distillates to Central Asia. It is likely to expand in all of those segments.
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