Gunvor (oil trader)
Encyclopedia
Gunvor Group Ltd is an energy trading company registered in Nicosia
, Cyprus
, with major trading operations in Geneva
and Singapore
. The company operates in the trade, transport and storage of petroleum
and other energy products, as well as having investments in oil terminal and port facilities. Its operations consist of securing crude oil upstream and delivering it to market via pipelines and tankers.
The company, which was founded in 1997, is the fourth largest crude oil trader in the world after Glencore
, Vitol
, and Trafigura
, and is controlled by Gennady Timchenko
and Torbjörn Törnqvist.
Gunvor's main supplier of crude oil is Russia, though the company also trades African, Asian and South-American crude and is active on all continents.
"Gunvor" is an Old Norse
name meaning "careful in fighting". Torbjörn Törnqvist's mother was named Gunvor.
According to the Financial Times, until 2007 the company was a "niche player" focused on exporting Russian oil through Estonia
, relying on the expertise of its two founders in the oil business, Russian market and transit logistics. Torbjörn Törnqvist is a Swedish citizen born in 1953. He has traded oil across the world for over twenty years, beginning his career at BP
. Gennady Timchenko is a Finnish citizen born in the Soviet Union
in 1952. He has more than 20 years experience in the oil industry, beginning with the Kirishi refinery during perestroika
, and was one of the first Russians to export oil to Europe after the Soviet Union collapsed.
In 2007, Gunvor's turnover was US$43 billion, with exports of 83 million tons of oil and petroleum products (60 million tons in 2006) and according to Tornqvist in an interview with Swedish business magazine Affärsvärlden
the company expected to increase its volume to 110-115 million tons in 2009 . In 2008, turnover was approximately $70 billion.
. According to the company website, Gunvor is associated with a railway oil transportation company (Transoil) and owns its own shipping company, Clearlake Shipping Ltd, which shipped 30% of the Baltic
crude oil (20.5 million tonnes) in 2006.
According to Nefte Compass, from February 2002 to February 2008, Russian oil exports through Gunvor increased sixteen times. The company controls 60% of the volume transiting through Estonia, and 41% of that transit via the port of Primorsk, Leningrad Oblast
.
In 2009, Gunvor made major investments into physical assets such as oil terminals and facilities, the largest being into its oil export terminal in the port of Ust-Luga
on the Baltic Sea
, outside of St-Petersburg. In September 2009, the terminal was sold to Transneft
.
In September 2009, Gunvor made its first direct investment in oil exploration when it purchased a 30% interest in Lagansky block in the Caspian sea
from Lundin Petroleum
. The field has proven reserves of over 230 million barrels of oil.
for America and Singapore for Asia. The group has also opened offices in Amsterdam
, Moscow
, Houston, Beijing
and Nigeria
.. Gunvor has stated that it intends to develop its new energy trading division so that it will become a more significant part of a more diversified business.
In 2009, Gunvor established its Global Energy division, focused on trading a broad range of energy commodities including Global Coal and Freight, Emissions and Renewables, Natural Gas and LNG and Power.
The company intends to continue to expand and diversify in 2010, both geographically and across the energy value chain. Marking a new phase in its expansion into the European energy markets, Gunvor entered its first trades in the natural gas
, power and carbon markets in January 2010, and extending its trading capability across North West and Central Europe for physical natural gas and coal across the globe.
In April 2010, the company hired traders who take responsibility for Gunvor's physical-gas positions across continental Europe, D. Smith for as a coal trader in 2010, and Fredrik Bodecke who will be responsible for the Nordic and Baltic electricity markets.
Following the major Wikileaks
release of US State Department cables in November 2010, it was reported by the London Daily Telegraph that the wealth of Russian Prime Minister Vladimir Putin
is linked to a "secretive Swiss-based oil trading firm" called Gunvor. It said that John Beyrle
, the United States
Ambassador
to the Russian Federation stated that close connections exist between Gunvor and the Russian Government and that he reported: "its secretive ownership is rumoured to include prime minister Putin." The newspaper goes on to report that Gunvor has, however, totally refuted the existence of any links between it and Mr Putin. Gunvor stated in response to the Wikileak disclosure that Timchenko and Tornqvist owned "a large majority of Gunvor" and that a "minority stake is owned by an employee benefit trust". It went on to say that "the company had taken out credit facilities which require full disclosure of company ownership".
According to former Chairman
of the Russian State Duma
Ivan Rybkin
, and Russian political scientist Stanislav Belkovsky
, who's affiliated with Boris Berezovsky (Russian oligarch-in-exile and a political opponent of Putin), Putin controls (among other investments) 50% in Gunvor, run by Gennady Timchenko, a close friend.
Nicosia
Nicosia from , known locally as Lefkosia , is the capital and largest city in Cyprus, as well as its main business center. Nicosia is the only divided capital in the world, with the southern and the northern portions divided by a Green Line...
, Cyprus
Cyprus
Cyprus , officially the Republic of Cyprus , is a Eurasian island country, member of the European Union, in the Eastern Mediterranean, east of Greece, south of Turkey, west of Syria and north of Egypt. It is the third largest island in the Mediterranean Sea.The earliest known human activity on the...
, with major trading operations in Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
and Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
. The company operates in the trade, transport and storage of petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
and other energy products, as well as having investments in oil terminal and port facilities. Its operations consist of securing crude oil upstream and delivering it to market via pipelines and tankers.
The company, which was founded in 1997, is the fourth largest crude oil trader in the world after Glencore
Glencore
Glencore International plc is a multinational mining and commodities trading company headquartered in Baar, Switzerland and with its registered office in Saint Helier, Jersey...
, Vitol
Vitol
The Vitol group is an energy trading company founded in Rotterdam in 1966. Vitol operates worldwide and, along with Glencore and Trafigura, is one of the world's top three crude oil traders. Vitol's headquarters are located in Rotterdam, the Netherlands and Geneva, Switzerland...
, and Trafigura
Trafigura
Trafigura is an Amsterdam-based multinational company founded in 1993 trading in base metals and energy, including oil. the company had equity of more than $2 billion and a turnover of $73 billion that generated $440 million of profit....
, and is controlled by Gennady Timchenko
Gennady Timchenko
Gennady Nikolayevich Timchenko Gennady Nikolayevich Timchenko Gennady Nikolayevich Timchenko (also spelled Guennadi Timtchenko; (born 1952) is a prominent businessman, active in the energy trading business, citizen of Finland, currently living in Geneva, Switzerland....
and Torbjörn Törnqvist.
Gunvor's main supplier of crude oil is Russia, though the company also trades African, Asian and South-American crude and is active on all continents.
"Gunvor" is an Old Norse
Old Norse
Old Norse is a North Germanic language that was spoken by inhabitants of Scandinavia and inhabitants of their overseas settlements during the Viking Age, until about 1300....
name meaning "careful in fighting". Torbjörn Törnqvist's mother was named Gunvor.
Early years
The company was created in 1997, by Gennady Timchenko and Torbjörn Törnqvist. In 2003, the company started operations in Geneva.According to the Financial Times, until 2007 the company was a "niche player" focused on exporting Russian oil through Estonia
Estonia
Estonia , officially the Republic of Estonia , is a state in the Baltic region of Northern Europe. It is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia , and to the east by Lake Peipsi and the Russian Federation . Across the Baltic Sea lies...
, relying on the expertise of its two founders in the oil business, Russian market and transit logistics. Torbjörn Törnqvist is a Swedish citizen born in 1953. He has traded oil across the world for over twenty years, beginning his career at BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
. Gennady Timchenko is a Finnish citizen born in the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
in 1952. He has more than 20 years experience in the oil industry, beginning with the Kirishi refinery during perestroika
Perestroika
Perestroika was a political movement within the Communist Party of the Soviet Union during 1980s, widely associated with the Soviet leader Mikhail Gorbachev...
, and was one of the first Russians to export oil to Europe after the Soviet Union collapsed.
In 2007, Gunvor's turnover was US$43 billion, with exports of 83 million tons of oil and petroleum products (60 million tons in 2006) and according to Tornqvist in an interview with Swedish business magazine Affärsvärlden
Affärsvärlden
Affärsvärlden is a Swedish business magazine, published weekly. It was founded in 1901. It is published by Affärsvärlden Förlag AB, which is a subsidiary of Talentum Sweden AB....
the company expected to increase its volume to 110-115 million tons in 2009 . In 2008, turnover was approximately $70 billion.
Logistics and infrastructures
Gunvor has invested in oil storage facilities, railway transportation as well as port facilities and terminals, therefore ensuring a "comparative advantage over their competitors", according to Törnqvist interviewed by the Financial TimesFinancial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
. According to the company website, Gunvor is associated with a railway oil transportation company (Transoil) and owns its own shipping company, Clearlake Shipping Ltd, which shipped 30% of the Baltic
Baltic Sea
The Baltic Sea is a brackish mediterranean sea located in Northern Europe, from 53°N to 66°N latitude and from 20°E to 26°E longitude. It is bounded by the Scandinavian Peninsula, the mainland of Europe, and the Danish islands. It drains into the Kattegat by way of the Øresund, the Great Belt and...
crude oil (20.5 million tonnes) in 2006.
According to Nefte Compass, from February 2002 to February 2008, Russian oil exports through Gunvor increased sixteen times. The company controls 60% of the volume transiting through Estonia, and 41% of that transit via the port of Primorsk, Leningrad Oblast
Primorsk, Leningrad Oblast
Primorsk is a coastal town in Vyborgsky District of Leningrad Oblast, Russia, and the largest Russian port on the Baltic. It is located on the Karelian Isthmus, west of St. Petersburg, at the northern coast of the Gulf of Finland, near Birch Islands, protected as a sea bird sanctuary...
.
In 2009, Gunvor made major investments into physical assets such as oil terminals and facilities, the largest being into its oil export terminal in the port of Ust-Luga
Ust-Luga
Ust-Luga is a settlement and railway station in Kingiseppsky District of Leningrad Oblast, Russia, situated on the Luga River near its entry into the Luga Bay of the Gulf of Finland, about west of St. Petersburg....
on the Baltic Sea
Baltic Sea
The Baltic Sea is a brackish mediterranean sea located in Northern Europe, from 53°N to 66°N latitude and from 20°E to 26°E longitude. It is bounded by the Scandinavian Peninsula, the mainland of Europe, and the Danish islands. It drains into the Kattegat by way of the Øresund, the Great Belt and...
, outside of St-Petersburg. In September 2009, the terminal was sold to Transneft
Transneft
Transneft is a Russian state-owned business responsible for the national oil pipelines. It was founded in 1993 and owns the largest oil pipeline system in the world, with a total network length of almost...
.
In September 2009, Gunvor made its first direct investment in oil exploration when it purchased a 30% interest in Lagansky block in the Caspian sea
Caspian Sea
The Caspian Sea is the largest enclosed body of water on Earth by area, variously classed as the world's largest lake or a full-fledged sea. The sea has a surface area of and a volume of...
from Lundin Petroleum
Lundin Petroleum
Lundin Petroleum is an independent international petroleum company formed in 2001 and based in Sweden.-History:The company was formed in 2001 following the takeover of Lundin Oil AB by Canadian independent Talisman Energy, Lundin Petroleum AB is a Swedish oil company traded on the Stockholm Stock...
. The field has proven reserves of over 230 million barrels of oil.
Expansion
Gunvor has expanded beyond its Russian roots, and trades globally, including in the Middle East, Asia, Africa and the Americas with its main trading hubs located in Geneva for Europe, New YorkNew York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
for America and Singapore for Asia. The group has also opened offices in Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
, Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
, Houston, Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
and Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
.. Gunvor has stated that it intends to develop its new energy trading division so that it will become a more significant part of a more diversified business.
In 2009, Gunvor established its Global Energy division, focused on trading a broad range of energy commodities including Global Coal and Freight, Emissions and Renewables, Natural Gas and LNG and Power.
The company intends to continue to expand and diversify in 2010, both geographically and across the energy value chain. Marking a new phase in its expansion into the European energy markets, Gunvor entered its first trades in the natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
, power and carbon markets in January 2010, and extending its trading capability across North West and Central Europe for physical natural gas and coal across the globe.
In April 2010, the company hired traders who take responsibility for Gunvor's physical-gas positions across continental Europe, D. Smith for as a coal trader in 2010, and Fredrik Bodecke who will be responsible for the Nordic and Baltic electricity markets.
Ownership
The ownership of Gunvor cannot be ascertained, as it is a privately-owned company. It is said that its two founders hold an equal number of shares, with the balance being held in an employee benefit trust for senior management .Following the major Wikileaks
Wikileaks
WikiLeaks is an international self-described not-for-profit organisation that publishes submissions of private, secret, and classified media from anonymous news sources, news leaks, and whistleblowers. Its website, launched in 2006 under The Sunshine Press organisation, claimed a database of more...
release of US State Department cables in November 2010, it was reported by the London Daily Telegraph that the wealth of Russian Prime Minister Vladimir Putin
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
is linked to a "secretive Swiss-based oil trading firm" called Gunvor. It said that John Beyrle
John Beyrle
John R. Beyrle , a career Foreign Service Officer and specialist in Russian and Eastern European affairs, is currently Ambassador of the United States to the Russian Federation.- Biography :...
, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
Ambassador
Ambassador
An ambassador is the highest ranking diplomat who represents a nation and is usually accredited to a foreign sovereign or government, or to an international organization....
to the Russian Federation stated that close connections exist between Gunvor and the Russian Government and that he reported: "its secretive ownership is rumoured to include prime minister Putin." The newspaper goes on to report that Gunvor has, however, totally refuted the existence of any links between it and Mr Putin. Gunvor stated in response to the Wikileak disclosure that Timchenko and Tornqvist owned "a large majority of Gunvor" and that a "minority stake is owned by an employee benefit trust". It went on to say that "the company had taken out credit facilities which require full disclosure of company ownership".
According to former Chairman
Speaker of the Duma
The Chairman of the State Duma of the Federal Assembly of the Russian Federation , also called Speaker , is the presiding officer of the lower house of the Russian parliament...
of the Russian State Duma
State Duma
The State Duma , common abbreviation: Госду́ма ) in the Russian Federation is the lower house of the Federal Assembly of Russia , the upper house being the Federation Council of Russia. The Duma headquarters is located in central Moscow, a few steps from Manege Square. Its members are referred to...
Ivan Rybkin
Ivan Rybkin
Ivan Petrovich Rybkin is a Russian politician; was Chairman of Russia's State Duma in 1994–96 and Secretary of the Security Council in 1996–98.-Early life:...
, and Russian political scientist Stanislav Belkovsky
Stanislav Belkovsky
Stanislav Alexandrovich Belkovsky is a Russian political analyst and communication specialist. A political conservative, he is said to be very close to Russian businessman Boris Berezovsky...
, who's affiliated with Boris Berezovsky (Russian oligarch-in-exile and a political opponent of Putin), Putin controls (among other investments) 50% in Gunvor, run by Gennady Timchenko, a close friend.
The Economist lawsuit
On November 27, 2008, as part of a lengthy special report on Russia, The Economist mentioned Timchenko in an article headlined Grease My Palm, that repeated, briefly, previously published statements about Timchenko and Gunvor. Both parties sued for libel . The Economist withdrew the contested material from its website. The lawsuit was settled in July 2009 . The Economist published a statement stating that:
In a section of our special report on Russia entitled "Grease my palm" (29 November 2008) we referred to Gunvor and its co-founder, Gennady Timchenko. We are happy to make it clear that when we referred to the "new corruption" in today's Russia, we did not intend to suggest that either Gunvor or Mr Timchenko obtained their Russian oil business as a result of payment by them of bribes or like corrupt inducements. RosneftRosneftRosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...
sells only 30-40% of its oil through Gunvor rather than the "bulk" of Rosneft's oil (as we described it). We accept Gunvor's assurances that neither Vladimir Putin nor other senior Russian political figures have any ownership interest in Gunvor. We regret if any contrary impression was given.
Further reading
- Catherine Belton, Neil Buckley On the offensive: How Gunvor rose to the top of Russian oil trading - Financial Times, May 14, 2008
- Gennady Timchenko Gunvor, Putin and me: the truth about Russian oil trader - Financial Times, May 22, 2008
- An article from Michael J. Economides published by Human Events