Commodity dealer Trafigura has offered a multibillion-dollar stake in a large Russian oil undertaking to an obscure Hong Kong firm that was arrange simply 9 days earlier than Russia invaded Ukraine.
Trafigura mentioned in an announcement on Wednesday that its 10 per cent stake in Vostok Oil, a gargantuan Arctic growth backed by Russian president Vladimir Putin, had been offered to “an unbiased Hong Kong registered buying and selling firm”, Nord Axis Restricted.
Company filings in Hong Kong present Nord Axis was integrated on February 15, the week earlier than Russian tanks crossed the Ukrainian border.
The sale shines a highlight on a brand new group of merchants in Russian oil that has emerged for the reason that invasion. Nord Axis has lifted 20,000 barrels a day of Russian oil for the reason that starting of March, forming a part of wider group of not less than 24 merchants new to Russian enterprise which have collectively taken about 450,000 b/d within the second quarter, in response to Petro-Logistics, a Swiss-based cargo-tracking group.
Whereas dealing in Russian oil just isn’t instantly prohibited by western sanctions, most of the largest merchants comparable to Trafigura have curtailed the enterprise in response to public and political strain.
It’s unclear who’s behind Nord Axis or what funds it needed to elevate to amass the Vostok stake. Phrases of the deal between the 2 privately held corporations weren’t disclosed, however Trafigura mentioned Nord Axis had taken on the $5.8bn of “non-recourse financial institution debt” it had borrowed from Russian lenders to finance its authentic $7.3bn buy of the asset final yr.
When Trafigura, whose annual turnover is $230bn, signed the deal final yr, it represented its largest ever funding and got here with a promise of entry to thousands and thousands of barrels of Russian oil it might market internationally.
Trafigura needed to inject $1.5bn of its personal money into the undertaking and borrowed $5.8bn from the Credit score Financial institution of Moscow, a fast-growing lender with ties to state-backed oil firm Rosneft and its chief government Igor Sechin — one among Putin’s closest allies. Trafigura final month wrote off its fairness funding.
Company filings in Hong Kong and Singapore determine people concerned in Nord Axis, together with some that share names with a Singapore-based former Glencore dealer and a Turkish lawyer who specialises in power.
Nord Axis was integrated in February by Allex Deeraj Heredia, resident of Belize. Heredia informed the Monetary Occasions that he had no energy over choices associated to the corporate and that his companion in Hong Kong, Asia Enterprise Consultants, communicated with the last word helpful proprietor of the corporate, who he believed was Azerbaijani.
The corporate director has since modified thrice. The present director Murat Sayin was appointed in June. Sayin shares the identify with a lawyer based mostly in Istanbul who specialises in power, in response to a company web site.
Company filings in Singapore present that Sayin was one among two new administrators registered at CB Enterprises Pte Ltd on Tuesday, the Singapore-registered particular objective automobile utilized by Trafigura in 2021 to amass the Vostok stake. Sayin didn’t reply to emails and cellphone calls searching for remark.
The opposite new director registered on Wednesday at CB Enterprises was Sukhjeet Singh Sekhon. An individual of the identical identify was listed in a 2013 courtroom doc as a Glencore gasoline oil dealer based mostly in Singapore. Sekhon couldn’t be reached for remark.
Randhir Ram Chandra was named as firm secretary on the similar time, the filings present. An eponymous regulation agency in Singapore, which says it specialises in company buildings, didn’t reply to a request for remark.
Whether or not any of those people in the end management Nord Axis is unclear. The Hong Kong filings listing its sole shareholder as an organization referred to as Asia Enterprise Consultants Ltd, which is registered on the similar handle as Nord Axis — a tower block within the Hong Kong district of Wan Chai.
Asia Enterprise Consultants is owned by a Hong Kong resident named Yin Chun Lee, the filings present, although he’s thought to not be the last word proprietor.
Russia hopes the Vostok Oil undertaking will develop a brand new oil-producing area on Siberia’s Taymyr Peninsula to rival the US Permian Basin and Saudi Arabia’s Ghawar oilfield. It is going to pull collectively current manufacturing of about 370,000 barrels per day and exploration belongings and hyperlink them to markets in Europe and Asia through the Northern Sea Route, a fair-weather delivery lane between the Atlantic and Pacific oceans.
Earlier than the invasion of Ukraine led to elevated sanctions on the Russian oil business, together with limiting entry to western expertise and gear, it aimed to finally produce near 2mn b/d.
Trafigura had lengthy courted Rosneft, competing with rivals Glencore and Vitol to be the most important merchants of Russian oil. All three corporations offered Rosneft with short-term financing permissible beneath sanctions launched after Russia’s annexation of Crimea in 2014.
Trafigura mentioned that Nord Axis was not a Russian firm, including it had now stopped buying and selling all Russian crude oil and ceased taking any barrels from Rosneft, although it nonetheless handles some Russian refined merchandise from unbiased producers.
