Trafigura Pushes Forward With Expansion Plans in Russia

By Sarah Kent

LAUSANNE--Trafigura Beheer B.V. has increased its oil trading activity in Russia, with the country remaining an attractive region for commodities traders despite the current challenges posed by restrictive western sanctions.

Trafigura Chief Executive Jeremy Weir said the company is trading more oil in the country, though it remains compliant with the strict constraints on financial transactions with Russian entities. The trading house began to beef up its exposure in the country, hiring a team of senior traders from TNK BP and signing a sizeable pre-export finance deal with state-owned oil company Rosneft (ROSN.MZ).

"As far as we're aware there are no sanctions on oil trading in Russia," Mr. Weir told the FT Global Commodities Summit in Lausanne.

Other traders are more cautious. Gunvor Group is in the process of selling its Russian assets in a move to diversify the company after its co-founder Gennady Timchenko was placed under sanctions by the U.S. Treasury last year. Mr. Timchenko no longer has any stake in the company, which has also expressed its interest in buying assets in North America. However, in the long term, Russia and its enormous natural resources remain attractive to commodities players.

"I think Russia still has huge potential," said Torbjorn Tornqvist, chief executive of Gunvor Group. "I do believe there are a lot of companies waiting to go back there." He didn't mention whether Gunvor might be amongst them.

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