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Trafigura sells stake in Putin-backed oil project to obscure HK trading outfit

Commodity trader Trafigura sold a multi-billion dollar stake in a huge Russian oil project to an obscure Hong Kong company set up just nine days before Russia invaded Ukraine.

Trifigura said inside Statement on Wednesday 10% of its shares in Vostok Oil, a huge Arctic development backed by Russian President Vladimir Putin, have been sold to an independent Hong Kong-listed trading company, Nord Axis Limited.

Corporate documents in Hong Kong show that the Nord Axis was incorporated on February 15, a week before Russian tanks crossed the Ukrainian border.

The sale shines a spotlight on a new group of Russian oil traders that has grown since the invasion. Nord Axis has hoisted 20,000 barrels of Russian oil per day since early March, forming part of a wider group of at least 24 new traders in the Russian business, which together took about 450,000 barrels per day in the second quarter, according to Petro-Logistics. , A cargo tracking group based in Switzerland.

While Russian oil deals are not directly prohibited by Western sanctions, many of the biggest traders like Trafigura have reduced the business in response to public and political pressure.

It is unclear who is behind Nord Axis or what funds it would have had to raise to purchase the shares in Westock. The terms of the deal between the two private companies were not disclosed, but Trafigora said Nord Axis had taken on $ 5.8 billion of “non-repayable bank debt” it had borrowed from Russian lenders to finance The original $ 7.3 billion acquisition From the property last year.

When Trefigure, whose annual turnover stands at $ 230 billion, signed the deal last year, it represented the largest investment ever and came with a promise of access to millions of barrels of Russian oil that could be marketed worldwide.

Trapigora was forced to inject $ 1.5 billion of its cash into the project and borrowed $ 5.8 billion from Moscow’s credit bank, accompanied by rapid growth with ties to state-owned oil company Rosneft and CEO Igor Sachin – one of Putin’s closest allies. Its investment in stocks.

Corporate filings in Hong Kong and Singapore identify people involved in Nord Axis, including some who share names with a former Singapore glencore trader and a Turkish lawyer who specializes in energy.

Nord Axis was incorporated in February by Allex Deeraj Heredia, a resident of Belize. Hardia told the Financial Times that he has no power over the company’s related decisions and that his partner in Hong Kong, Asia Business Consultants, has contacted the company’s ultimate helpful owner, who he believes is Azerbaijani.

The company manager has since been replaced three times. Current director Murat Seine was appointed in June. Sayin shares the name with an Istanbul-based lawyer who specializes in energy, according to a corporate website.

Corporate filings in Singapore show Sayin was one of two new directors registered Tuesday at CB Enterprises Pte Ltd, the Singapore-listed dedicated vehicle used by Trafigura in 2021 to buy Westok shares. Seine did not respond to emails and phone calls seeking to be responded to.

Another new director registered on Wednesday at CB Enterprises was Sukhjeet Singh Sekhon. A man of the same name was listed in a 2013 court document as a Singapore-based Glencore fuel merchant. Sekhon’s response could not be reached.

Randir Ram Chandra was appointed company secretary at the time, according to the files. A reputable law firm in Singapore, which he says specializes in corporate buildings, did not respond to a request for comment.

It’s not clear if any of these people will eventually control Nord Axis. Hong Kong’s submissions list its sole shareholder as a company called Asia Business Consultants Ltd, registered at the same address as Nord Axis – Block Tower in Wan Chai’s Hong Kong Province.

Asia Business Consultants is owned by a Hong Kong resident named Yin Chun Lee, according to the submissions, although he is not considered the ultimate owner.

Russia hopes the Vostok Oil project will open up a new oil-producing region on the Siberian Peninsula in Siberia, which will compete with the US Premiere basin and Saudi Arabia’s Ghawar oil field. It will connect an existing production of about 370,000 barrels per day and exploration assets and link them to markets in Europe and Asia through North Sea PathA sailing route in fine weather between the Atlantic Ocean and the Pacific Ocean.

Before the invasion of Ukraine led to increased sanctions on the Russian oil industry, including restricting access to Western technology and equipment, it eventually aspired to produce close to 2 million bullets a day.

Trafigora courted Rosneft for a long time, competing with rivals Glencore and Vitol to become Russia’s largest traders. All three companies provided Rosneft with short-term funding allowed under sanctions imposed after Russia’s annexation of Crimea in 2014.

Trafigura said Nord Axis is not a Russian company, adding that it has now stopped trading in all Russian crude oil and has stopped taking all barrels from Rosneft, even though it still handles some Russian refined products from independent producers.

Trafigura sells stake in Putin-backed oil project to obscure HK trading outfit Source link Trafigura sells stake in Putin-backed oil project to obscure HK trading outfit

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