Trafigura Group Pte. Ltd. is a Singaporean-based Swiss
multinational commodity trading company founded in 1993 that trades in
base metal
A base metal is a common and inexpensive metal, as opposed to a precious metal such as gold or silver. In numismatics, coins often derived their value from the precious metal content; however, base metals have also been used in coins in the past ...
s and energy.
[ It is the world's largest private metals trader and second-largest oil trader] having built or purchased stakes in pipelines, mines, smelters, ports and storage terminals. The company operates through a complex network of over 100 subsidiaries across the world, with main operating offices in Geneva
Geneva ( ; french: Genève ) frp, Genèva ; german: link=no, Genf ; it, Ginevra ; rm, Genevra is the second-most populous city in Switzerland (after Zürich) and the most populous city of Romandy, the French-speaking part of Switzerland. Situa ...
and Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
.
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.
Trafigura has been named or involved in several scandals, particularly the 2006 Ivory Coast toxic waste dump
The 2006 Ivory Coast toxic waste dump was a health crisis in Ivory Coast in which a ship registered in Panama, the ''Probo Koala'', chartered by the Singaporean-based oil and commodity shipping company Trafigura Beheer BV, offloaded toxic waste ...
, which left up to 100,000 people with skin rashes, headaches and respiratory problems. 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.
Initially focused on three regional markets – South America (oil and minerals), Eastern Europe (metals) and Africa (oil) – Trafigura has since diversified and expanded globally.
In November 2013 it was announced that Tory peer and former leader of the House of Lords
The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is by appointment, heredity or official function. Like the House of Commons, it meets in the Palace of Westminst ...
Baron Strathclyde
Baron Strathclyde is a title that has been created twice in British history, both times in the Peerage of the United Kingdom. It was first created on 15 January 1914 when the politician and judge Alexander Ure was made Baron Strathclyde, of Sa ...
, 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
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...
arm following the 2009 controversy over the Côte d'Ivoire incident.
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.
Investments
In 2003 the group established its fund management subsidiary, Galena Asset Management. In 2010, Trafigura bought 8% of Norilsk Nickel
Norilsk Nickel (russian: ГМК «Норильский никель»), or Nornickel, is a Russian nickel and palladium mining and smelting company. Its largest operations are located in the Norilsk–Talnakh area near the Yenisei River in th ...
.
On 24 May 2007 an explosion occurred in Sløvåg Gulen
is a municipality in the southwestern part of Vestland county, Norway. It is part of the traditional district of Sogn. The administrative center of the municipality is the village of Eivindvik. Other villages in Gulen include Brekke, Byrkne ...
, Sogn og Fjordane
Sogn og Fjordane (; English: "Sogn and Fjordane") was, up to 1 January 2020, a county in western Norway, when it was merged to become part of Vestland county. Bordering previous counties Møre og Romsdal, Oppland, Buskerud, and Hordaland, the cou ...
, Norway
Norway, officially the Kingdom of Norway, is a Nordic countries, Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of ...
in a tank owned by , that had severe environmental and health consequences for people living nearby. In 2008 the Norwegian Broadcasting Corporation
NRK, an abbreviation of the Norwegian ''Norsk Rikskringkasting AS'', generally expressed in English as the Norwegian Broadcasting Corporation, is the Norwegian government-owned radio and television public broadcasting company, and the larges ...
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. 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.
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
Puma Energy is a Swiss multinational mid- and downstream oil company, majority-owned by Singapore-based Swiss company Trafigura.
Its operations span around 40 countries across five continents and encompass the supply, storage, refining, di ...
. 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. The same month, Trafigura joint venture DT Group partnered with Angola’s state oil firm Sonangol
Group Sonangol ( pt, Grupo Sonangol) is a parastatal that formerly oversaw petroleum and natural gas production in Angola. The group consisted of Sonangol E.P. ( pt, Sociedade Nacional de Combustíveis de Angola, E.P.) and its many subsidiaries. ...
to form a new company, Sonaci DT Pte Ltd, to market Angola’s new liquefied natural gas
Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the vol ...
(LNG) exports.
In March 2013, Trafigura announced a deal with South Sudan
South Sudan (; din, Paguot Thudän), officially the Republic of South Sudan ( din, Paankɔc Cuëny Thudän), is a landlocked country in East Africa. It is bordered by Ethiopia, Sudan, Central African Republic, Democratic Republic of th ...
to export Dar Blend crude oil from Port Sudan
Port Sudan ( ar, بور سودان, Būr Sūdān) is a port city in eastern Sudan, and the capital of the state of Red Sea. , it has 489,725 residents. Located on the Red Sea, Port Sudan is recognized as Sudan's main seaport and the source of 9 ...
. 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.
In October 2013 Trafigura secured USD 1.5 billion in financing for an upfront loan to Russian oil producer OAO Rosneft
PJSC Rosneft Oil Company ( stylized as ROSNEFT) is a Russian integrated energy company headquartered in Moscow. Rosneft specializes in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petro ...
. 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.
A month later Trafigura signed an agreement with Dallas-based pipeline operator Energy Transfer Partners
Energy Transfer LP is an American company engaged in natural gas and propane pipeline transport. It is organized under Delaware state laws and headquartered in Dallas, Texas. It was founded in 1995 by Ray Davis and Kelcy Warren, who remains Cha ...
to transport crude oil and condensate via a partially converted 82-mile pipeline from the Eagle Ford oil field in McMullen County, Texas
McMullen County is a county located in the U.S. state of Texas. As of the 2020 census, its population was 600, making it the fourth-least populous county in Texas. Its county seat is Tilden. The county was established from parts of Bexar Co ...
, to Trafigura’s deep-water terminal at Corpus Christi Bay, near the Gulf of Mexico.
In February 2014 Trafigura signed an agreement to acquire a 30% equity stake in the Jinchuan Group
Jinchuan Group Ltd. (Chinese: 金川集团) is a Chinese company based in Gansu. It produces the metals nickel, copper, cobalt, platinum, palladium, gold, silver and selenium. As of 2007 it has the capacity to produce 150,000 metric tons of refin ...
's newly established 400,000 tonnes-per-year copper smelter in Fangchengang, China.
In July 2014 Trafigura launched Lykos, an online platform in India to sell metals to small and medium-sized manufacturers in the country.
In September 2014 Trafigura completed the $860 million sale of an 80% stake in a Corpus Christi Texas oil storage terminal to Buckeye Partners
Buckeye Partners, formerly known as the Buckeye Pipeline Company, is a distributor of petroleum in the East and Midwest areas of the United States. A direct descendant of Standard Oil, the company is considered one of the largest independent oil p ...
LP.
In June 2015 Trafigura announced a 50:50 joint venture with Abu Dhabi investment company Mubadala Development Company
Mubadala Investment Company PJSC ( ar, شركة مبادلة للاستثمار), or simply Mubadala, is an Emirati state-owned holding company that acts as a sovereign wealth fund. The company was established in 2017 when then-named Mubadala De ...
—to invest in base metals
A base metal is a common and inexpensive metal, as opposed to a precious metal such as gold or silver. In numismatics, coins often derived their value from the precious metal content; however, base metals have also been used in coins in the p ...
mining. As part of the agreement Mubadala also acquired 50% of Trafigura's (Matsa) mining operation, which owns three mines in southern Spain that produce copper, zinc and lead concentrate ores. This followed a doubling of processing capacity at the company's MATSA mining operation in Andalusia
Andalusia (, ; es, Andalucía ) is the southernmost autonomous community in Peninsular Spain. It is the most populous and the second-largest autonomous community in the country. It is officially recognised as a "historical nationality". The ...
, Spain, where two new satellite mines are also being developed.
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
Barrancabermeja is a city in Colombia, located on the shore of the Magdalena River, in the western part of the department of Santander. It is home to the largest oil refinery in the country, under direct management of ECOPETROL. Barrancabermeja ...
inland and Barranquilla
Barranquilla () is the capital district of Atlántico Department in Colombia. It is located near the Caribbean Sea and is the largest city and third port in the Caribbean Coast region; as of 2018 it had a population of 1,206,319, making it Co ...
on the Atlantic coast, will allow transportation of crude oil and petroleum products, dry bulk, containerised and general cargo to and from inland Colombia.
In October 2016 it was announced that Trafigura and Russian investment group United Capital Partners
UCP Investment Group is an independent asset management company investing in publicly traded securities and private companies with a primary focus on the Russian market.
UCP’s investment portfolio includes assets in the industrial, oil & gas an ...
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.
Trafigura was criticised in December 2022 for handing out "more than $1.7bn (£1.4bn) to its top traders and shareholders after the energy crisis, fuelled by the war in Ukraine".
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.
In March 2010 Trafigura made its first venture into capital markets, issuing Euro 400m ($539m) in five-year Eurobonds.
The following month Trafigura listed its first perpetual subordinated bond
In finance, subordinated debt (also known as subordinated loan, subordinated bond, subordinated debenture or junior debt) is debt which ranks after other debts if a company falls into liquidation or bankruptcy.
Such debt is referred to as 'subordi ...
on the Singapore Exchange
The Singapore Exchange Limited (SGX) is a Singaporean investment holding company that provides different services related to securities and derivatives trading and others. SGX is also a member of the World Federation of Exchanges and the Asian ...
(SGX) at a fixed rate of 7.625%. The issuance raised $500m in long-term capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used fo ...
that is treated as equity
Equity may refer to:
Finance, accounting and ownership
*Equity (finance), ownership of assets that have liabilities attached to them
** Stock, equity based on original contributions of cash or other value to a business
** Home equity, the diff ...
by international accounting rules, leaving existing shareholders undiluted.
By 2011, its revenue had increased to $121.5 billion and its profits to $1.11 billion, with profits falling 11% in 2012.
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.
In March 2016, Trafigura closed a 46 million yen ($413 million) three-year loan, doubling the size of its 2014 Samurai loan.
Activities
Trafigura operates 65 offices in 36 countries.
Trafigura is the third-largest physical commodities trading group in the world behind Vitol and Glencore
Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. Glencore's oil and gas head office is in London and its registered office is in Saint Helier, Jersey. The current company wa ...
. Trafigura sources, stores, blends and transports raw materials including oil, refined petroleum products and non-ferrous metals (iron ore and coal).[ ]
Trade in non-ferrous and bulk commodities – mainly copper, lead and zinc concentrate, alumina, refined metals of copper, lead, zinc and aluminium as well as the iron ore and coal trading books – made up 13% of Trafigura’s overall trading turnover in 2016. The group traded 8.2 million tonnes of non-ferrous metal concentrates and 6.6 million tonnes of non-ferrous refined metal during the year. Overall volume across metals and minerals increased by 13% from 2015 to 59 million tonnes.
Trading volumes in oil and petroleum products totalled 4.3 million barrels a day in 2016, up 42% from 3 million barrels a day in 2015.
In October 2016 Trafigura sold five medium-range tankers to China’s Bank of Communications Financial Leasing Co, marking its exit from owning product tankers.
In support of its arbitrage
In economics and finance, arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more markets; striking a combination of matching deals to capitalise on the difference, the profit being the difference between t ...
-based business model
A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, soci ...
, Trafigura ensures a degree of control over supply, storage and logistics through industrial subsidiaries: oil storage and distribution business Puma Energy
Puma Energy is a Swiss multinational mid- and downstream oil company, majority-owned by Singapore-based Swiss company Trafigura.
Its operations span around 40 countries across five continents and encompass the supply, storage, refining, di ...
, in which Trafigura holds a 49% interest.
Trafigura is involved in paper trading through its subsidiary Galena Asset Management, which was set up in 2003 to invest in commodity funds.
The company was named in the Iraq Oil-for-Food Scandal in connection with a Liberian-registered turbine tanker, ''Essex'', that had UN approval to load Iraqi crude at Iraq’s main export terminal at Mina al-Bakr. The tanker was chartered by Trafigura Beheer BV. According to her captain, Theofanis Chiladakis, the Essex was 'topped off' at least twice, with a total of 272,000 barrels of crude, after UN monitors had signed off the cargo.
This was on 13 May and 27 August 2001. Elf Aquitaine
Elf Aquitaine is a French brand of oils and other motor products (such as brake fluids) for automobiles and trucks. Elf is a former petroleum company which merged with TotalFina to form "TotalFinaElf". The new company changed its name to Total ...
employees had first talked about this scheme in February 1998.
In February 2013, Trafigura Maritime Ventures Limited—the Malta based subsidiary of Trafigura Maritime Logistics PTE Limited based in Singapore—and the oil trading arm of Total became involved in an oil price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
controversy that led them to both be barred from the tendering process at the Enemalta oil purchasing board. Between 1999 and 2012, Enemalta paid the two companies $3.2 billion for oil, accounting for 70% of the oil purchased by Enemalta in that time period.
In May 2015, the Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
reported that Trafigura has become a major exporter for Rosneft
PJSC Rosneft Oil Company ( stylized as ROSNEFT) is a Russian integrated energy company headquartered in Moscow. Rosneft specializes in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petro ...
crude oil from Russia despite sanctions. The company has seen a surge for such exports, almost 9 million barrels of crude in April 2015, mostly for Asian markets, financed by pre-pay oil deals in form of short term loans that are not subject to sanctions. While some commodity traders have been cautious dealing with sanctioned companies, Trafigura, which works with a number of global banks financing the oil deals, has found a reliable partner in Rosneft for global business.
In 2016, the Swiss non-governmental organisation
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...
Public Eye published the results of its investigation showing how traders – especially Trafigura – prepare and sell "African quality" toxic fuel to Africa, containing high levels of sulphur that causes particulate matter
Particulates – also known as atmospheric aerosol particles, atmospheric particulate matter, particulate matter (PM) or suspended particulate matter (SPM) – are microscopic particles of solid or liquid matter suspended in the air. The te ...
pollution, damaging human health.BBC News
BBC News is an operational business division of the British Broadcasting Corporation (BBC) responsible for the gathering and broadcasting of news and current affairs in the UK and around the world. The department is the world's largest broadc ...
"Fuel 'too dirty' for Europe sold to Africa"
, British Broadcasting Corporation #REDIRECT BBC #REDIRECT BBC
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, 15 September 2016 (page visited on 25 October 2016).
, from March 2017 (the European limit is 10 parts per million).