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Oil Inches Higher On Strong Crude Draw

Oil Inches Higher On Strong Crude Draw

Oil prices rebounded on Wednesday…

Russia’s Lukoil May Sell 20% In Oil Trader Litasco

Litasco shipping

Russia’s second-biggest oil producer, Lukoil, is mulling over selling 20 percent of its oil trading arm, Litasco, to managers of the oil trader, Lukoil’s chief executive Vagit Alekperov said on Friday.

In the summer of last year, Lukoil was said to be studying the possible sale of its Switzerland-based trading arm, Litasco, fearing that the new U.S. sanctions on Russia would make it more difficult for the oil trader to raise new financing.

Geneva-based Litasco was set up in 2000 as the exclusive international marketing and trading company of Lukoil, and trades Lukoil’s as well as third-party crude oil and refined petroleum products.

In 2015, Litasco handled 3.2 million barrels per day. In 2016, that figure rose slightly, with the share of Lukoil and third-party volumes roughly remaining 50/50, Litasco’s chief executive Tim Bullock told Reuters in an interview in February 2017.

It was unclear how much money Lukoil could get from a Litasco sale, as most oil and commodity traders are not listed. According to Reuters, the book values of Litasco’s competitors range between US$2 billion and US$6 billion.

Litasco needs an increasing amount of capital, and this affects Lukoil’s financial performance, Alekperov said last summer. “We have more efficient projects that need investment,” Alekperov said.

At the end of 2017, the Lukoil chief said that Lukoil was studying a possible listing of Litasco in Europe, a management buyout, or merging Litasco with another trader, Russian business newspaper Vedomosti reported. Alekperov said later that Lukoil had put off the decision on the Litasco sale until 2018, due to a number of technological issues.

Today, Lukoil’s board of directors reviewed the preliminary 2017 results and set the priorities for this year.

The company’s long-term development program approved by the board of directors in December 2017 is primarily targeted at efficiency improvements and growth in the financial results.

“It also includes a number of important changes that we plan to implement already in 2018,” Alekperov said in a Lukoil statement on Friday.

By Tsvetana Paraskova for Oilprice.com

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