Gunvor set for buying spree after windfall: CEO

  • : Biofuels, Crude oil, Electricity, Emissions, Metals, Natural gas, Oil products
  • 24/04/12

Trading firm Gunvor plans to use part of a massive earnings windfall over the past two years to build out its asset base, its chief executive Torbjörn Törnqvist told Argus.

"Today, we are under-invested in assets so we will change that," Törnqvist said, adding that investments would be broad based and to some extent opportunistic. "We will employ quite a lot of capital in investments."

Independent commodity trading companies are sitting on unprecedented piles of cash after two years of bumper earnings arising from supply chain disruptions and market volatility. While Geneva-based Gunvor is smaller than its peers Vitol, Trafigura and Mercuria, it is still a huge company by most metrics. It reported revenues of $127bn in 2023 and a profit of $1.25bn, following a record $2.36bn in 2022. It has kept most of its earnings in house and had an equity position of almost $6.16bn by the end of 2023 — its highest ever.

Törnqvist is eyeing further growth.

"We will definitely be a much bigger company, that I can say," he replied when asked where he saw Gunvor in 10 years' time. "I think we will grow in tune with the [energy] transition."

Trading firms are looking for ways to keep their competitive advantage, particularly given the uncertainties associated with the energy transition. One emerging trend is an appetite for infrastructure. Vitol is in the process of buying a controlling stake in Italian refiner Saras, which operates the 300,000 b/d Sarroch refinery in Sardinia. Trafigura said this week that it is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast.

Part of the rationale behind these moves is to increase optionality and take advantage of the loss of Russian products to the European market, as well the closure of large chunks of local refining capacity.

Gunvor owns the landlocked 100,000 b/d Ingolstadt refinery in Germany and a 75,000 b/d refinery in Rotterdam, where it plans to shift away from fossil fuel use.

"Many oil refineries have been up for sale and still are," Törnqvist said. Asked if Gunvor was looking for something similar, he said the company is interested in the "right opportunity" whether in upstream, downstream, midstream or shipping.

"It all feeds into what we are doing and all supports our underlying trading," he said.

But Törnqvist suspects a lot of Gunvor's growth will come from gas and power — areas where trading companies are already seeing rising profits. The company made its first investment in a power generation asset late in 2023, when it agreed to buy BP's 75pc stake in the 785MW Bahia de Bizkaia combined-cycle gas turbine plant in Bilbao, Spain. It has signed a slew of LNG offtake agreements in the past year and continues to grow its LNG tanker fleet.

"We're building logistical capabilities in LNG," Törnqvist said.

"Oil is here to stay"

Törnqvist said Gunvor is well placed to navigate the energy transition, and is stepping up investments in renewables and biofuels and expanding into carbon and metals trading.

"There will be disruptions, there will be different paths to the transition in different parts of the world which go at different paces and have different priorities and ways to deal with it," he said. "This will create opportunities."

But Törnqvist is clear that oil and gas will remain an integral part of Gunvor's business.

"We feel that oil is here to stay," he said. "And it will grow for several years."


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24/06/14

Venezuela to require appointments at some gas stations

Venezuela to require appointments at some gas stations

Caracas, 14 June (Argus) — Venezuelan drivers will need to schedule appointments in order to purchase gasoline from retail outlets selling government subsidized fuel, oil minister Pedro Tellechea told Argus on Friday. The subsidized gasoline is still inexpensive, at 2¢/liter, and plentiful, Tellechea said, despite drivers often waiting in line for hours for the fuel. But under a plan to modernize the stations selling the subsidized gas with new pumps and flat screen monitors, an appointment system will soon be required for purchases. Venezuela raised gasoline prices to 50¢/liter in 2020, to what the government has called a "international price," but then set aside stations meant just for members of the ruling party and other groups, where they could buy gasoline for much less. Today about 60pc of the country's 1,800 retail gas stations sell at unsubsidized prices. Half of Venezuela's gas stations will be refurbished this year, with pumps that can fill up an SUV in 20 seconds, supply 700 vehicles a day, and accept all forms of payment, Tellechea told reporters at a model station in Altamira, east Caracas, on Friday. "There aren't in South America gas stations right now just like the ones you are seeing today," he said. "Drivers won't have to wait in line at subsidized stations, they will have their appointments programmed to the second." Tellechea said Venezuelans are now using 95,000 b/d of gasoline but he declined to say how much is being produced domestically. Tallecha said oil production was growing, reaching "above 950,000 b/d" on Friday, but that included about 40,000 b/d of condensates and natural gas liquids. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil's B4 carbon market sells first offsets


24/06/14
24/06/14

Brazil's B4 carbon market sells first offsets

Sao Paulo, 14 June (Argus) — Brazil's fledgling B4 carbon market approved forest conservation organization SOS Vida Silvestre to issue the first offsets for trading on its platform. SOS Vida Silvestre focuses on preserving forest in the Atlantic Rainforest in Rio de Janeiro state and on reducing wildlife fatalities on highways. The organization issued 5mn t of CO2 equivalent (CO2e) of biodiversity offsets and will use the revenues from the sale to expand its conservation efforts. The offsets were trading at R53.97 ($10.02) each today. B4 is analyzing an additional 15.8mn t CO2e in offsets from other entities and has 73 companies that are in the process of listing offsets on the exchange. The exchange uses blockchain technology, which it argues can offer more accurate carbon offset traceability, increasing reliability of the market. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

FAA, EASA probe Boeing, Airbus Ti parts


24/06/14
24/06/14

FAA, EASA probe Boeing, Airbus Ti parts

Houston, 14 June (Argus) — The US Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA) are investigating whether falsified documents were used to verify the authenticity of titanium used in parts manufactured by Spirit Aerosystems and others for Boeing and Airbus jets. The US probe arose after Boeing alerted the federal regulator that material was procured through a distributor "who may have falsified or provided incorrect records," the FAA told Argus . The FAA is looking into the scope and impact of the issue. The EASA was notified by the Italian Civil Aviation Authority (Enac) of the issue and has subsequently started an investigation to determine if the traceability issue also has safety implications, an EASA spokesperson told Argus . There is currently no evidence of a safety issue in the fleet, it added, but it will investigate the root cause and monitor new developments. "This is about titanium that has entered the supply system via documents that have been counterfeited," a Spirit spokesperson told Argus . Boeing added that the issue affected some titanium shipments received by a "limited set of suppliers," including its fuselage maker Spirit, and relates to a "very small number of parts" on any of its aircraft. Boeing declined to specify on which programs and for what components the titanium in question was used, but it said the correct titanium alloy was used. Affected parts were produced from 2019-2023, Spirit said. Boeing is removing suspect parts on its planes before delivering them to customers for compliance purposes, but confirmed its in-service fleet is safe to operate based on an internal analysis, it said. Airbus confirmed the airworthiness of its A220 aircraft after conducting "numerous tests" on parts coming from the same source of supply, and said it is working in close collaboration with its supplier, an Airbus spokesperson told Argus . Spirit removed the units from production and performed over 1,000 tests to ensure the "mechanical and metallurgical properties" of the titanium continued to meet airworthiness standards. Spirit supplies an array of parts to Airbus and Boeing including fuselages, pylons, and wing structures. Titanium alloys are typically used in engine components such as turbines and compressor blades, landing gears and fasteners. Aerospace companies including Airbus and Boeing earlier this year formed a coalition to help prevent unauthorized parts from entering the supply chain. It followed actions taken by CFM International, and its parent companies GE Aerospace and Safran Aircraft Engines, last years in response to engine parts sold by British distributor AOG Technics with forged documents. By Alex Nicoll and Samuel Wood Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Phillips 66 to balance fossil and renewable fuels


24/06/14
24/06/14

Q&A: Phillips 66 to balance fossil and renewable fuels

Houston, 14 June (Argus) — With Phillips 66's Rodeo, California, refinery expected to ramp up to over 50,000 b/d of renewable fuels production by the end of this quarter, all eyes are on the refiner for what is next. Zhanna Golodryga , executive vice president of emerging energy and sustainability for Phillips 66, talked to Argus at the refiner's Houston headquarters about how the company looks at investments, its focus on sustainable aviation fuel (SAF) production and why Texas might be the Silicon Valley of the energy transition. The conversation has been edited for clarity and length. When Rodeo reaches full capacity, it will represent about 3pc of your overall output. What will your fleet look like longer-term and what will be the renewables/petroleum split? Not all the refineries in our portfolio are created equal, and when we look at them what I call them is "lower-carbon energy hubs". Not low, lower, because it's going to be a combination of everything. We're looking at the assets we have in the portfolio and what we can do to help bring in lower carbon solutions and what can we build out. Our focus is going to continue to be SAF. We understand the limitations of feedstocks and we have a very strong commercial organization that is now working on providing feedstocks just for Rodeo. But we're also thinking about what we can do to bring in different feedstocks. Energy transition opportunities aren't going to replace our traditional fossil fuel refining. It's an "and", not an "or". You've highlighted a future focus on SAF. Does that mean a move away from renewable diesel (RD)? I think we have flexibility to do both and it will be market driven going forward. We have to look at demand but there is demand for SAF globally, not just in the US. Demand for gasoline is not as strong as demand for diesel and sustainable aviation fuel. That is what our focus is and then we want to diversify the feedstock. What is your outlook for RD? I think RD is here for quite some time. It's hard to predict what's going to happen by 2050 but I think we will have the demand. It's going to take a long time to electrify all future transportation. I think we have a much better opportunity for now to focus on what we're really good at. That's fuels, renewable fuels. You have faced activist investor pressure calling for Phillips 66 to focus on its core refining business. How do investors feel about the Rodeo conversion and your future plans? We have taken a pragmatic approach to the energy transition. We have criteria that we follow prior to taking any projects over the line, specifically the energy transition type projects. They must meet five key prerequisites: the right returns, the right technology that has been proven at scale, the right regulatory environment, preferably involve a partnership and be done at the right time. We have to prove with Rodeo that this is, as I call it, our license to continue to grow the business. This is our license to operate additional energy transition business. This one is going to be done extremely well. What are the policy tailwinds and headwinds to your renewables investments? When we look at our opportunities in our energy transition portfolio, we are building our economic model for them to produce the right returns without any incentives. That is our starting point. On the other hand, the IRA [US Inflation Reduction Act] has been a bipartisan initiative and we think it's going to stand for the greater good of the planet. We have to think globally, as we have the Humber refinery in the UK. It's interesting for us to see what's possible in the US with the IRA incentives, versus more of a stick in Europe. But the challenge for us is permitting and timing. We probably could have brought Rodeo online sooner if we didn't have to wait for some permits. Our headquarters are in Texas and Texas is the "energy transition Silicon Valley". I'm repeating someone's words and those are the words of Bill Gates. But I believe that. We're perfectly positioned on the Gulf coast to go to the next phase and build something here. You've mentioned Phillips 66's 265,000 b/d Sweeny refinery in Old Ocean, Texas, as a low carbon energy hub. Does that mean it is a candidate for renewable fuel conversion or co-processing? It could be an option, maybe not at Sweeny, but in the Gulf coast, maybe Lake Charles. It's driven by our hardware, just like what we've done at Rodeo. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

S Africa's ANC, DA agree to form government


24/06/14
24/06/14

S Africa's ANC, DA agree to form government

Cape Town, 14 June (Argus) — South Africa's African National Congress (ANC) and Democratic Alliance (DA) political parties today agreed to form a government while the first sitting of the new parliament was underway. The agreement, which includes the Inkatha Freedom Party (IFP), paves the way for ANC leader Cyril Ramaphosa to be re-elected president. The parties will assume various positions in government broadly in proportion to their share of seats. The government of national unity (GNU) agreement is the result of two weeks of intense negotiations after the ANC lost its long-held majority in the national election on 29 May. It secured 40.2pc of the vote, and the centre-right, pro-market DA retained its position as the official opposition with 21.8pc. The deal scuppers the possibility of an alliance between the ANC and the two largest left-wing parties, MK (uMkhonto weSizwe) and the Economic Freedom Fighters (EFF), which credit ratings agency Fitch warned could pose risks to macroeconomic stability . MK party unseated the EFF in the election to come third, winning 14.6pc of the vote. The EFF secured 9.5pc, and the IFP came a distant fifth with 3.85pc. The MK and EFF are populist parties that campaigned on agendas including wide-scale land expropriation without compensation, nationalisation of economic assets — including mines, the central bank and large banks and insurers — halting fiscal consolidation and aggressively increasing social grants. The GNU parties agreed the new administration should focus on rapid economic growth, job creation, infrastructure development and fiscal sustainability. Other priorities include building a professional, merit-based and non-partisan public service, as well as strengthening law enforcement agencies to address crime and corruption. Through a national dialogue that will include civil society, labour and business, parties will seek to develop a national social compact to enable South Africa to meet its developmental goals, they said. The GNU will take decisions in accordance with the established practice of consensus, but where no consensus is possible a principle of sufficient consensus will apply. By Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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