Gunvor creates role to oversee disposal of Russian assets

Gunvor, one of the world's biggest oil traders, has created a position that will oversee dealmaking and investments as the Switzerland-based company seeks to reduce its presence in Russia.

Jacques Erni, Gunvor chief financial officer, said that Gia Mai, previously the company's corporate finance director, had been appointed chief investment officer.

He added that Mr Mai was leading efforts to divest Gunvor's Russian assets and had established a mergers and acquisitions team in Singapore to study opportunities in the Asia-Pacific region.

Speaking at the FT Commodities Global Summit on Wednesday, Mr Erni said that Gunvor was looking at deals but also investments in Europe, North America and South America.

Unlike some of its peers, which have preferred to buy rather than build, Gunvor has invested a large chunk of its profits in developing projects, such as its Russian oil terminals, from scratch.

Gunvor used to have a leading position in the Russian oil market, at one point handling about a third of the country's seaborne exports, and enabling it to nurture one of the world's largest commodities trading businesses.

However, the company was shaken last year when the US government imposed sanctions on Gennady Timchenko, its Russian co-founder, and alleged that President Vladimir Putin was a secret investor in the company.

Gunvor has strenuously denied any links to the Kremlin or Mr Putin. Mr Timchenko sold his 43 per cent stake in Gunvor to chief executive and co-founder Torbjorn Tornqvist the day before the US sanctions were announced.

Mr Tornqvist is looking to rebalance its portfolio of industrial assets. Gunvor is seeking buyers for all or part of Ust-Luga on the Baltic Sea, one of the world's largest oil terminals. It is also looking for buyers for its 50 per cent stake in the Novorossiysk terminal on the Black Sea. This month Gunvor sold its 30 per cent stake in Kolmar, the Siberian coal producer,

Senior executives at trading houses said that it was difficult to acquire assets cheaply because of the competition from private groups, which had raised billions of dollars to invest in resources.

"There is a lot cheap money around, interest rates are low and there's a lot of money in places like private equity," Ian Taylor, chief executive of Vitol, the world's biggest independent oil trader, said at the FT summit. "The market is very efficient and we are not seeing any bargains."

Industry insiders also said that it would be difficult for Gunvor to find non-Russian buyers for its assets in the country and secure attractive prices.

But Mr Tornqvist said at the FT summit that Russia still had huge potential, and companies would return once the "dust settles" and sanctions were removed.

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