Russia Monitor is a review of the most important events related to Russian internal and external security, as well as its foreign policies.
Date: 20 July 2022 Author: Grzegorz Kuczyński
Trafigura Sells Stake In Vostok Oil To Mysterious Buyer
Trading giant Trafigura is continuing to unwind Russian business with the sale of its 10 percent stake in Rosneft’s Vostok Oil project. It sold a stake to an obscure Hong Kong registered purchaser.
In April 2022, Trafigura said it would not buy a Vostok Oil share, promising to exit the project. The trading giant said the sale of its Vostok stake, including the associated non-recourse bank debt, was completed July 12 for an undisclosed price. No information was disclosed about the mysterious purchaser, behind which there may be a serious business player seeking to remain anonymous. Commodity trader Trafigura has sold a multibillion-dollar stake in a giant Russian oil project to Nord Axis Limited, an obscure Hong Kong company that was incorporated only on February 15, 2022. The company has lifted large amounts of Russian oil since the beginning of March. The Hong Kong filings list its sole shareholder as a company called Asia Business Consultants Ltd, which is registered at the same address as Nord Axis under the name of Yun Jin Li, a Hong Kong resident. It is unclear who is behind Nord Axis or what funds it had to raise to acquire the Vostok stake. Rosneft’s Vostok Oil is Russia’s biggest-ever oil project since the Soviet era. Its resources amount to more than 6 billion tons of oil, which is a fifth of all Russian oil resources combined. The Vostok project comprises 52 license areas involving comprising 13 oil and gas fields in the northern Krasnoyarsk Krai and the Yamalo-Nenets Autonomous Region, including the Vankor field and the Payakshky field. The project includes exports through the Northern Sea Route via an oil handling terminal on the Taymyr peninsula. Trafigura paid $7 billion to help pay for the 10% stake in Vostok Oil in 2020, also via a syndicated loan arranged by a private Russian bank, Credit Bank of Moscow. The loan facility was secured by the stake in Vostok Oil. Rosneft took money from the Trafigura deal to buy back the Taymyr field from its former CEO, Eduard Khudaynatov. Sechin claimed the project to become operational by 2024 to send 30 million tons of oil abroad; as scheduled, in 2030, up to 100 million tons of oil will be annually shipped. But Western sanctions dealt a serious blow to Vostok Oil, which has now a years-long delay. In late 2021, The Trafigura deal valued the Vostok Oil project at $85 billion. Yet it must have seen a drop in value. Nonetheless, the gargantuan Arctic development is backed by Russian president Vladimir Putin.
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