Commodity dealer Trafigura has bought 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 a press release on Wednesday that its 10 per cent stake in Vostok Oil, a gargantuan Arctic growth backed by Russian president Vladimir Putin, had been bought to “an independent Hong Kong registered trading company”, Nord Axis Limited.
Corporate 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 because the invasion. Nord Axis has lifted 20,000 barrels a day of Russian oil because the starting of March, forming a part of a wider group of a minimum of 24 merchants new to Russian enterprise which have collectively taken about 450,000 b/d within the second quarter, in accordance with Petro-Logistics, a Swiss-based cargo-tracking group.
While dealing in Russian oil shouldn’t be immediately prohibited by western sanctions, lots of the largest merchants akin to Trafigura have curtailed the enterprise in response to public and political strain.
It is unclear who’s behind Nord Axis or what funds it needed to increase to amass the Vostok stake. Terms 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 bank debt” it had borrowed from Russian lenders to finance its unique $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 may market internationally.
Trafigura needed to inject $1.5bn of its personal money into the undertaking and borrowed $5.8bn from the Credit Bank of Moscow, a fast-growing lender with ties to state-backed oil firm Rosneft and its chief govt Igor Sechin — certainly one of Putin’s closest allies. Trafigura final month wrote off its fairness funding.
Corporate 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 vitality.
Nord Axis was integrated in February by Allex Deeraj Heredia, a resident of Belize. Heredia advised the Financial Times that he had no energy over choices associated to the corporate and that his companion in Hong Kong, Asia Business Consultants, communicated with the last word useful proprietor of the corporate, who he believed was Azerbaijani.
The firm director has since modified 3 times. The present director Murat Sayin was appointed in June. Sayin shares the identify with a lawyer primarily based in Istanbul who specialises in vitality, in accordance with a company web site.
Corporate filings in Singapore present that Sayin was certainly one of two new administrators registered at CB Enterprises Pte Ltd on Tuesday, the Singapore-registered particular function automobile utilized by Trafigura in 2021 to amass the Vostok stake. Sayin didn’t reply to emails and cellphone calls in search of remark.
The different new director registered on Wednesday at CB Enterprises was Sukhjeet Singh Sekhon. An individual of the identical identify was listed in a 2013 court docket doc as a Glencore gas oil dealer primarily based in Singapore. Sekhon couldn’t be reached for remark.
Randhir Ram Chandra was named as firm secretary on the identical time, the filings present. An eponymous legislation agency in Singapore, which says it specialises in company buildings, didn’t reply to a request for remark.
Whether any of those people in the end management Nord Axis is unclear. The Hong Kong filings listing its sole shareholder as an organization known as Asia Business Consultants Ltd, which is registered on the identical tackle as Nord Axis — a tower block within the Hong Kong district of Wan Chai.
Asia Business 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 will pull collectively present manufacturing of about 370,000 barrels per day and exploration property 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.
Before the invasion of Ukraine led to elevated sanctions on the Russian oil trade, together with limiting entry to western expertise and tools, it aimed to ultimately produce near 2mn b/d.
Trafigura had lengthy courted Rosneft, competing with rivals Glencore and Vitol to be the largest merchants of Russian oil. All three corporations supplied Rosneft with short-term financing permissible below sanctions launched after Russia’s annexation of Crimea in 2014.
Trafigura mentioned that Nord Axis was not a Russian firm, including it had 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.