Trafigura Group Pte. Ltd. is a Singaporean-based Swiss[5] multinational commodity trading company founded in 1993 that trades in base metals and energy.[2][6][7] It is the world’s largest private metals trader and second-largest oil trader[8][9] having built or purchased stakes in pipelines, mines, smelters, ports and storage terminals.[10] The company operates through a complex network of over 100 subsidiaries across the world,[11] with main operating offices in Geneva and Singapore.[12]
Trafigura was formed by Claude Dauphin and Eric de Turckheim in 1993, but quickly split off from a group of companies managed by Marc Rich.[9]
Trafigura has been named or involved in several scandals, particularly the 2006 Ivory Coast toxic waste dump, which left up to 100,000 people with skin rashes, headaches and respiratory problems.[13] The company was also involved in the Iraq Oil-for-Food Scandal.
History
Trafigura Beheer BV was established as a private group of companies in 1993 by six founding partners: Claude Dauphin, Eric de Turckheim, Graham Sharp, Antonio Cometti, Daniel Posen and Mark Crandall.[14][15]
Initially focused on three regional markets – South America (oil and minerals), Eastern Europe (metals) and Africa (oil) – Trafigura has since diversified and expanded globally.[16]
In November 2013 it was announced that Tory peer and former leader of the House of Lords Baron Strathclyde, Thomas Galbraith would be joining Trafigura as a non-executive director. He had previously stood down from the board of the group’s hedge fund arm following the 2009 controversy over the Côte d’Ivoire incident.[17]
Executive chairman Claude Dauphin and the last remaining founder in an executive position, owned less than 20 per cent of the group’s equity at his death in September 2015, while more than 700 senior managers control the rest.[18]
Investments
In 2003 the group established its fund management subsidiary, Galena Asset Management.[19] In 2010, Trafigura bought 8% of Norilsk Nickel.[20]
On 24 May 2007 an explosion occurred in Sløvåg Gulen, Sogn og Fjordane, Norway in a tank owned by Vest Tank [no], that had severe environmental and health consequences for people living nearby. In 2008 the Norwegian Broadcasting Corporation published the 50 min documentary “Dirty Cargo” disclosing what had happened in the small community prior to the explosion. The company Vest Tank was trying to neutralize the same kind of chemical waste that was dumped in Côte d’Ivoire when the explosion occurred. The owner of the waste was Trafigura, on whose behalf Vest Tank was working.[21][22][23] Even so, Norwegian authorities did not prosecute Trafigura and the company was not accused of direct responsibility in the Vest Tank incident. Requests by Norwegian police to interview Trafigura employees were not granted by the company.[24]
In February 2013 Trafigura invested $800 million in the Australian energy market, acquiring more than 250 petrol stations, two oil import terminals and five fuel depots in three separate acquisitions by its subsidiary Puma Energy.[25][26] At the time, there was interest in Australia among energy traders due to a combination of rising demand and the closure of outdated, high-cost refineries.[27] The same month, Trafigura joint venture DT Group partnered with Angola’s state oil firm Sonangol to form a new company, Sonaci DT Pte Ltd, to market Angola’s new liquefied natural gas (LNG) exports.[28]
In March 2013, Trafigura announced a deal with South Sudan to export Dar Blend crude oil from Port Sudan.[29] The agreement with South Sudan was a continuation of Trafigura’s longtime presence in the Sudanese oil market and followed the resolution of a legal dispute between Sudan and South Sudan over transit fees and oil revenues.[30]
In October 2013 Trafigura secured USD 1.5 billion in financing for an upfront loan to Russian oil producer OAO Rosneft. The prepayment facility, which provided a loan for advance payment for more than 10 million tons of products over five years, was the largest such deal ever completed by Trafigura.[31]
A month later Trafigura signed an agreement with Dallas-based pipeline operator Energy Transfer Partners to transport crude oil and condensate via a partially converted 82-mile pipeline from the Eagle Ford oil field in McMullen County, Texas, to Trafigura’s deep-water terminal at Corpus Christi Bay, near the Gulf of Mexico.[32][33]
In February 2014 Trafigura signed an agreement to acquire a 30% equity stake in the Jinchuan Group’s newly established 400,000 tonnes-per-year copper smelter in Fangchengang, China.[34]
In July 2014 Trafigura launched Lykos, an online platform in India to sell metals to small and medium-sized manufacturers in the country.[35]
In September 2014 Trafigura completed the $860 million sale of an 80% stake in a Corpus Christi Texas oil storage terminal to Buckeye Partners LP.[10]
In June 2015 Trafigura announced a 50:50 joint venture with Abu Dhabi investment company Mubadala Development Company—to invest in base metals mining. As part of the agreement Mubadala also acquired 50% of Trafigura’s Minas de Aguas Teñidas [es] (Matsa) mining operation, which owns three mines in southern Spain that produce copper, zinc and lead concentrate ores.[36] This followed a doubling of processing capacity at the company’s MATSA mining operation in Andalusia, Spain, where two new satellite mines are also being developed.[37]
In August 2015 it was reported that Trafigura subsidiary Impala Terminals is investing USD1 billion in Colombia to develop a new inland road, rail and river network connecting major coastal ports with Colombia’s industrial heartland. The Magdalena River, which runs between Barrancabermeja inland and Barranquilla on the Atlantic coast, will allow transportation of crude oil and petroleum products, dry bulk, containerised and general cargo to and from inland Colombia.[38]
In October 2016 it was announced that Trafigura and Russian investment group United Capital Partners would each take a 24 per cent stake in Essar Oil, which owns India’s second-biggest private refinery in the western state of Gujarat as well as a network of 2,700 filling stations.[39]
Bond issuances and reported earnings
In 2008, the company had equity of more than $2 billion and a turnover of $73 billion that generated $440 million of profit.[9]
In March 2010 Trafigura made its first venture into capital markets, issuing Euro 400m ($539m) in five-year Eurobonds.[40]
The following month Trafigura listed its first perpetual subordinated bond on the Singapore Exchange (SGX) at a fixed rate of 7.625%.[41] The issuance raised $500m in long-term capital that is treated as equity by international accounting rules, leaving existing shareholders undiluted.[42][43]
By 2011, its revenue had increased to $121.5 billion and its profits to $1.11 billion,[44] with profits falling 11% in 2012.[45]
In 2013 as a consequence of the Singapore listing, Trafigura released financial statements for the first time, reporting Q1 profits of $216.1 million – up 3.2 per cent on the previous year. Revenue grew 7.9 per cent to USD 31.2 billion.[46]
In March 2016, Trafigura closed a 46 million yen ($413 million) three-year loan, doubling the size of its 2014 Samurai loan.[47]