CEO: Gunvor to Expand in United States After Strong Profits
(Reuters) — Energy trader Gunvor made strong profits last year and is looking to expand its oil trading and develop a significant power trading arm in the United States, its CEO told Reuters.
Swiss energy traders have posted record returns over the last few years as they thrived in extremely volatile markets brought on by the COVID-19 pandemic and then Russia's invasion of Ukraine last year.
"It was a very, very good year. All our activities did very well," CEO Torbjorn Tornqvist told Reuters on the sidelines of the Financial Times Commodities Global Summit, declining to give figures as the firm's results are still being finalized.
Gunvor, traditionally focused on oil and gas, metals and bulk commodities, has in recent years also begun trading power in Europe. Tornqvist said its U.S. arm had set up a power desk last year and was now hiring more people.
"Power is clearly something for the future. I think it forms a very important part of our future strategy. At this stage, it’s very new."
On the oil side, the firm will start gasoline blending operations in the United States on top of similar operations it has in Rotterdam and Asia.
Growing LNG volumes will also be a focus after a lull in 2022 when gas prices rose so high the market became paralyzed as Moscow turned off the taps.
"Europe was taking about 110 billion cubic meters per year from Russia. That’s about 1,000 LNG cargoes. We think Europe was able to cover about half... and the rest is demand destruction, close to 20%. Some of it is weather related," he said.
"As long as the price stays between 30 and 40 euros (per megawatt hour), demand will probably creep up. As it stands now, there is a surplus that needs to be cleared in the LNG market."
Tornqvist said the firm's traded oil and LNG volumes are more than 3 million barrels per day of oil equivalent.
Legal Provision
A former Gunvor employee pleaded guilty in 2021 to what U.S. federal prosecutors called a scheme to bribe Ecuadorean government officials to win business from state-controlled oil company Petroecuador.
The DOJ and the financial market regulator the CFTC have continued investigating the firm and Gunvor expects to pay a fine. "We are looking at whether to take a provision on our books for 2022," Tornqvist said.
Switzerland said in 2021 it was also looking into Gunvor's Ecuadorian deals.
As co-founder of Gunvor, Tornqvist remains the majority owner of the company but his stake slipped to 85.7% at the end of 2022, down from 88.4% year-on-year.
Industry sources familiar with the matter said Abu Dhabi National Oil Co has been looking to buy Gunvor, or at least a stake, since last year.
"There’s no secret that we are in contact with them," Tornqvist said. "There has been some talks around this, it’s pretty clear. We have a dialogue and a business relationship. We’ll see how far that goes."
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Polish Pipeline Operator Offers Firm Capacity to Transport Gas to Ukraine in 2025
Comments