Abu Dhabi Nationwide Oil Firm and Gunvor, the vitality buying and selling home, are extending an exclusivity interval for deal talks as they attempt to attain an settlement over a attainable funding.
Individuals near the deal say discussions might result in Adnoc taking a minority stake in Gunvor, whose web income soared to $841mn within the first half of final yr — greater than its full-year income in 2021 — as vitality markets had been roiled by Russia’s full-scale invasion of Ukraine.
The exclusivity interval for the talks, which started last summer, had been because of expire on the finish of December, in response to individuals aware of the matter.
Adnoc, which is the United Arab Emirates’ state oil producer and pumps roughly 4 per cent of all international crude provides, is working to diversify its income streams and construct out its buying and selling division.
Gunvor — co-founded in 2000 by chief govt Torbjörn Törnqvist and Russian oligarch Gennady Timchenko — is seeking to increase funds to drive progress.
Adnoc’s buying and selling arm is making ready to open its first Swiss workplace this yr, as a part of plans to broaden the unit.
Chief govt Sultan Ahmed Al Jaber, who may even function president of this year’s UN climate summit when the UAE hosts the assembly in November and December, beforehand stated he needed to “stretch the value” of each barrel of Adnoc oil by investments in refining and buying and selling capability.
However the talks have faltered at instances, with the 2 corporations having contrasting backgrounds: Adnoc is a state-owned vitality behemoth that based its buying and selling division lower than 5 years in the past, whereas Gunvor is thought for its aggressive tradition and its once-close ties to Russia.
Gunvor is considered one of a handful of large-scale unbiased commodity merchants, together with Trafigura, Vitol and Mercuria, that play a big function in international vitality buying and selling, performing as middlemen and operators of infrastructure corresponding to terminals and refineries.
The previous yr has seen unprecedented income for buying and selling homes due to the volatility in oil and gasoline markets triggered by Russia’s invasion of Ukraine.
Törnqvist, who controls nearly 90 per cent of Gunvor, has been contemplating a sale for a while. He held unsuccessful talks in 2019 with Algeria’s state-backed vitality firm Sonatrach and has mentioned potential tie-ups with different buying and selling homes prior to now, in response to individuals aware of the discussions.
Whereas Gunvor’s roots lie in Russian oil dealing, it has branched out in recent times to grow to be one of many world’s largest merchants of liquefied pure gasoline.
In 2014, shortly earlier than Gunvor co-founder Timchenko was sanctioned by the US authorities for his alleged ties to President Vladimir Putin, the Russian dealer offered his stake to Törnqvist, and has since left the corporate. The US state division alleged on the time that Putin himself might “have entry to Gunvor funds” with out offering proof.
Gunvor has all the time fiercely denied allegations that it has hyperlinks to Putin and has spent the 9 years since Timchenko’s exit diversifying its enterprise away from the Russian sector, corresponding to promoting most of its stake within the Ust Luga oil terminal, near the border with Estonia.
The commodity dealer, regardless of its file half-year income in 2022, has additionally confronted monetary pressures because of the excessive margin calls positioned on buying and selling homes owing to the intense volatility in vitality markets final yr.
Adnoc and Gunvor declined to remark.