Commodities trader Trafigura Group struck a deal to exit a major joint-venture with Rosneft Oil Co. in India, unwinding a relationship with Russia’s energy giant that was a decade in the making.
Trafigura said Wednesday it had sold its 24.5% take in India’s Nayara Energy Ltd. to Hara Capital Sarl. Hara is a subsidiary of Italy’s Mareterra Group Holding, which used to be known as Genera Group Holding SpA and invests in energy companies.
The companies didn’t disclose a price, but Trafigura valued its stake in Nayara at $165.9 million in its 2022 annual report. The company first said it had decided to sell the stake in 2021.
Rosneft retains its 49% stake in Nayara, which it took at the same time as Trafigura in 2017 when Russia was seeking to expand its energy ties with Asia—a push turbocharged by the war in Ukraine. Trafigura’s investment formed part of a combined 49% stake with Russian investment firm UCP Investment Group, which is sticking with Nayara, according to Trafigura’s statement.
Nayara runs the massive Vadinar refinery in Gujarat, in India, as well as a fuel-retail network.
Trafigura, privately held and based in Switzerland and Singapore, is one of the world’s biggest independent commodities traders, handling seven of every 100 barrels of oil consumed each day. For years before the invasion last February, it vied with rivals including Vitol and Glencore PLC to do business with Rosneft.
Rosneft, backed by the Kremlin, is one of the world’s biggest oil producers, but it relied on foreign middlemen to shift its oil to buyers around the world. Trafigura emerged as the biggest single overseas exporter of Rosneft oil. The Nayara investment cemented that relationship while giving Trafigura a foothold in the fast-growing Indian market.
Trafigura and its big rivals say they have largely quit the Russian market since the invasion, cutting exports and exiting other ventures with Rosneft. The shift pushed Rosneft to find new ways to export oil—sales of which are vital to the Russian economy—in part by leaning on upstart traders and shipping companies.
In July, Trafigura said it had sold a stake in a Rosneft-run oil project called Vostok to a previously unknown Hong Kong-based company. The buyer, Nord Axis, had registered just over a week before the invasion.
In December, Vitol said it had sold its own Vostok stake, which it held through a joint-venture.
The war shook up the economics of oil refining in ways traders are seeking to profit from.
Trafigura is involved in a deal for a separate large refinery in Italy. Isab, owned by Russian oil company Lukoil PJSC, had to be sold because it could no longer process Russian crude after a European Union embargo on the oil kicked in.
G.O.I. Energy Ltd., which says it is managed by a Cypriot private-equity firm, said this week it had agreed to buy the refinery in Sicily from Lukoil. G.O.I. also said it had agreed to use crude supplied by Trafigura, and for the trading firm to handle exports of the resulting fuels—giving Trafigura a stream of oil to trade in and out of Sicily. Trafigura isn’t investing in Isab itself.
The sale to G.O.I. is expected to close by the end of March pending approval by the Italian government and other authorities, the investment firm said.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 12, 2023, print edition as ‘Trafigura Ends Tie-Up in Russia-Backed Oil Venture.’
Commodities trader Trafigura Group struck a deal to exit a major joint-venture with Rosneft Oil Co. in India, unwinding a relationship with Russia’s energy giant that was a decade in the making.
Trafigura said Wednesday it had sold its 24.5% take in India’s Nayara Energy Ltd. to Hara Capital Sarl. Hara is a subsidiary of Italy’s Mareterra Group Holding, which used to be known as Genera Group Holding SpA and invests in energy companies.
The companies didn’t disclose a price, but Trafigura valued its stake in Nayara at $165.9 million in its 2022 annual report. The company first said it had decided to sell the stake in 2021.
Rosneft retains its 49% stake in Nayara, which it took at the same time as Trafigura in 2017 when Russia was seeking to expand its energy ties with Asia—a push turbocharged by the war in Ukraine. Trafigura’s investment formed part of a combined 49% stake with Russian investment firm UCP Investment Group, which is sticking with Nayara, according to Trafigura’s statement.
Nayara runs the massive Vadinar refinery in Gujarat, in India, as well as a fuel-retail network.
Trafigura, privately held and based in Switzerland and Singapore, is one of the world’s biggest independent commodities traders, handling seven of every 100 barrels of oil consumed each day. For years before the invasion last February, it vied with rivals including Vitol and Glencore PLC to do business with Rosneft.
Rosneft, backed by the Kremlin, is one of the world’s biggest oil producers, but it relied on foreign middlemen to shift its oil to buyers around the world. Trafigura emerged as the biggest single overseas exporter of Rosneft oil. The Nayara investment cemented that relationship while giving Trafigura a foothold in the fast-growing Indian market.
Trafigura and its big rivals say they have largely quit the Russian market since the invasion, cutting exports and exiting other ventures with Rosneft. The shift pushed Rosneft to find new ways to export oil—sales of which are vital to the Russian economy—in part by leaning on upstart traders and shipping companies.
In July, Trafigura said it had sold a stake in a Rosneft-run oil project called Vostok to a previously unknown Hong Kong-based company. The buyer, Nord Axis, had registered just over a week before the invasion.
In December, Vitol said it had sold its own Vostok stake, which it held through a joint-venture.
The war shook up the economics of oil refining in ways traders are seeking to profit from.
Trafigura is involved in a deal for a separate large refinery in Italy. Isab, owned by Russian oil company Lukoil PJSC, had to be sold because it could no longer process Russian crude after a European Union embargo on the oil kicked in.
G.O.I. Energy Ltd., which says it is managed by a Cypriot private-equity firm, said this week it had agreed to buy the refinery in Sicily from Lukoil. G.O.I. also said it had agreed to use crude supplied by Trafigura, and for the trading firm to handle exports of the resulting fuels—giving Trafigura a stream of oil to trade in and out of Sicily. Trafigura isn’t investing in Isab itself.
The sale to G.O.I. is expected to close by the end of March pending approval by the Italian government and other authorities, the investment firm said.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 12, 2023, print edition as ‘Trafigura Ends Tie-Up in Russia-Backed Oil Venture.’