Gunvor eyes Russian expansion, sees steady oil price

Global energy trader Gunvor Group is keen to expand its oil dealings in Russia, Chief Executive Torbjorn Tornqvist told Reuters, and sees oil prices staying rangebound over the next few months as the coronavirus pandemic weighs on demand.

“We want to do more in Russia. We are getting more oil there,” Tornqvist said in an interview on Tuesday, without detailing plans.

According to traders, Gunvor will be the largest buyer of Russian Urals from state-firm Rosneft out of the country’s two Baltic ports in April.

Rosneft has been trying to woo traders to invest in its massive Vostok Oil Project in the Arctic. Rival trading firm Trafigura bought a 10% stake in the project last year.

Geneva-based Gunvor’s beginnings were Russia-focused until 2014 when its co-founder Russian businessman Gennady Timchenko was put under sanctions by the U.S. Treasury that considered him a close ally to President Vladimir Putin.

At that point, Gunvor pivoted away from Russia, sold most of its assets and grew into a global business, including expansion into the United States. Russian trading accounted for 5% of its traded volumes in 2020.

Tornqvist said that 2020 was one of the best years for the firm from the trading perspective following a strong performance in 2019 after a difficult 2018 and a company reorganisation.

He added that the company had a strong start in 2021 between the extreme cold spells in Asia and in the southern United States that saw prices for liquefied natural gas (LNG), power and natural gas skyrocket.

“Texas, we got that right. LNG and natural gas did very well but refining is still a drag,” Tornqvist said. European refiners still need to contend with low margins and weak demand due to strict COVID-19 lockdowns aimed at curbing a third wave of contagions.

Tornqvist sees oil prices holding rangebound over the next months. Brent oil futures are trading in the low $60s a barrel .

“Stock draws are not going as fast as anticipated and demand is not fully back. Europe is going into another uncertain situation,” he said.

Gunvor mothballed its refinery at Antwerp, Belgium, but still runs two others, at Ingolstadt in Germany and in the Netherlands’ Rotterdam oil hub. The German refinery will undergo a turnaround in 2023 to boost efficiency and cut emissions.

The company announced this week that it had set up a new fund Nyera to invest in non-hydrocarbon projects while cutting emissions by 40%. (Reporting by Julia Payne and Dmitry Zhdannikov, additional reporting by Olga Yagova and Devika Krishna Kumar Editing by Marguerita Choy)

Source: Hydrocarbon processing

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