Page 13 - FSUOGM Week 24 2022

FSUOGM PROJECTS & COMPANIES FSUOGM

Trafigura fully writes down

Vostok Oil investment

RUSSIA GLOBAL commodities trader Trafigura suppliers and financiers are withdrawing from
announced on June 10 it had completely writ- the country’s oil sector, and even investors from
The trader has also ten down its investment in Rosneft’s Vostok Oil countries not aligned with Western sanctions
halted oil trade in megaproject in the Russian Arctic, after deciding against Moscow have shown reluctance to take
Russia. to offload its stake in the fields. their place.
Trafigura closed the purchase of a 10% inter- Geneva-based Trafigura posted a record
est in Vostok Oil in December 2020, initially profit for the six months ending March 31
investing €1.5bn ($1.6bn) of its own equity in of $2.7bn, on the back of soaring oil and gas
the deal, which included crude offtake commit- prices, marking a 27% increase year on year.
ments. Days after Moscow launched its invasion EBITDA also surged to $4.7bn, from $3.7bn a
of Ukraine, Trafigura said it was reviewing its year earlier.
shareholding in the project, and in late April, it Traded oil volumes rose 14% to 7.3mn bpd,
said it would cease all oil purchases from Ros- while sales of non-ferrous metals increased by
neft as soon as tighter EU rules on Russian crude 16% and bulk minerals by 13%.
sales came into effect. CEO Jeremy Weir said last “Extreme volatility … brought elevated mar-
week that Trafigura’s Russian business accounted gin calls and tighter position limits that made
for 6% of its total. hedging activity more expensive and in some
Vostok Oil comprises several large-sized oil- cases constrained access to commodities futures
fields in Russia’s far north that hold a combined markets,” Weir said in the report.
6bn tonnes (44bn) barrels of oil and substantial Trafigura added that a “lack of depth available
gas reserves. Rosneft says this is enough to sup- in commodities futures looks set to continue to
port 2mn barrels per day (bpd) of oil production, be a challenge.”
and as much as 50mn tonnes per year (tpy) of The trader’s credit lines rose by $7bn in the
LNG. The primary target market for these sup- six months ending March 31 to a record $73bn,
plies is Asia. enabling the company to cushion its trading
The project’s fate is now up in the air, though. needs, and net finance expenses climbed by 72%
Western oil producers, contractors, equipment to $689mn. ™

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