Abu Dhabi’s Adnoc and Gunvor extend talks to reach investment deal

Abu Dhabi National Oil Company and energy trader Gunvor are extending the exclusivity period for deal talks to reach agreement on a potential investment.

People close to the deal say Adnok could become a minority shareholder in Gunvol. Gunwol’s net profit soared to $841 million in the first half of last year, surpassing his full-year profit for 2021. Full-scale invasion of Ukraine.

The exclusivity period for negotiations, which began last summer, was due to expire at the end of December, according to people familiar with the matter.

Adnoc, the United Arab Emirates’ national oil producer and supplier of approximately 4% of the world’s crude oil supply, is committed to diversifying its revenue streams and building its trading arm.

Gunvor was co-founded in 2000 by CEO Torbjorn Trunkvist and Russian oligarch Gennady Timchenko to raise capital to fuel its growth.

Adnoc’s trading division is preparing to open its first Swiss office this year as part of plans to expand the division.

Sultan Ahmed Al Jaber, CEO and chairman of this year’s UN Climate Summit, which the United Arab Emirates will host in November and December, previously said Adnok Oil’s all said he wanted to “stretch the value” of barrels and trading capabilities.

However, negotiations sometimes stalled due to the contrasting backgrounds of the two companies. Adnoc is a state-owned energy giant that established its trading arm less than five years ago, and Gunvor is known for its proactive culture and former close ties. Russia.

Gunvor is one of the few large independent commodity traders such as Trafigura, Vitol and Mercuria that play a key role in global energy trading and act as brokers and operators of infrastructure such as terminals and refineries. .

Last year saw unprecedented gains for trading firms due to volatility in oil and gas markets triggered by Russia’s invasion of Ukraine.

Törnqvist, who controls almost 90% of Gunvor, has been considering selling it for some time. He has discussed possible partnerships with other trading firms in the past, after unsuccessful talks with Algeria’s state-owned energy firm Sonatrach in 2019, according to people familiar with the matter.

Gunvor’s roots lie in the Russian oil trade, but in recent years it has expanded to become one of the world’s largest traders of liquefied natural gas.

In 2014, Gunvor co-founder Timchenko sold his stake to Törnqvist and left the company shortly before he was sanctioned by the US government for his ties to President Vladimir Putin. At the time, the US State Department claimed that Putin himself could have “access to Gunvol’s funds” without providing evidence.

Gunvor, who has always vehemently denied any allegations of ties to Putin, has shunned the Russian sector nine years after Timchenko’s exit, including selling most of his stake in the Ustorga oil terminal near the Estonian border. We have diversified our business. .

Commodity traders are also facing financial pressure due to high margin calls imposed on trading firms due to extreme volatility in energy markets last year, despite record half-year profits in 2022.

Adnoc and Gunvor declined to comment.

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