June 18 Switzerland’s Gunvor has signed a deal with Gabon to create a joint trading company to sell oil products

June 18 Switzerland’s Gunvor has signed a deal with Gabon to create a joint trading company to sell oil products along the western coast of Africa in a sign the race is heating up between traders to expand in one of the world’s fastest growing fuel markets.
“This endeavor is a part of Gunvor’s broader efforts to expand globally, including in Africa, where we trade and work with more than a dozen nations,” Gunvor’s spokesman said. Industry sources said Gunvor will provide a loan of around $500 million to help start the company, which will be 55 percent owned by the Gabonese state and 45 percent owned by the trader.
Gunvor’s spokesman did not confirm the loan or details of the ownership structure. The operation will be based in the central African country’s oil hub of Port Gentil and could be operational as early as September, sources said.
Gunvor, like its peers Vitol and Trafigura, has sought to acquire assets like refineries and storage terminals to complement its trading business. Some of the most attractive assets are thought to be in Africa’s fuel market, which is set to grow by 40 percent by 2020 to 4.3 million barrels per day, according to Ecobank Research. Both Vitol and rival Trafigura have already set up important operations across Africa, buying entire chunks of businesses from oil majors.
“Gunvor continues to consider new investments in oil products terminals, LNG (liquefied natural gas) terminals, mini refineries and downstream facilities in Latin America, Africa, Central Asia and South Asia,” the firm said in a bond prospectus seen by Reuters last month.
It is already active in selling oil products to West Africa from storage in Europe, a source familiar with its strategy said. Last year, Gunvor said it had entered into a memorandum of understanding with Sao Tome to build oil storage and trading terminal.
Gunvor, which had a turnover of over $90 billion last year, also stepped up its activities in crude oil trading in West Africa in 2009-2010 as it sought to diversify from Russian oil.
But some had questioned whether it would continue to expand in the region after Switzerland opened a criminal investigation into money laundering in relation to its oil contract in the Republic of Congo in late 2011.
The investigation is linked to a former Gunvor employee and his associate. The company itself is not subject to the probe.

“Gunvor seeks partnerships based on a transparent model that enable it to invest in countries, and to provide training and build local know-how,” the spokesman said on Tuesday.
Top oil trader Vitol signed a long-term contract with Gabon to export oil earlier this year, trade sources said, in exchange for investment in the central African country’s oil sector.