Gunvor sells Ust-Luga oil terminal stake

Leading international commodities operator Gunvor has sold a 74-percent stake in the Ust-Luga oil terminal to Russian businessman Andrei Bokarev. The company will retain a 26-percent stake in the facility, which serves as the world’s largest oil products terminal, with a capacity of around 30 million tonnes per year. The specific terms of the transaction remain undisclosed.

Gunvor has been reducing its exposure to risk-prone business ventures in recent years. The company was affected by Ukraine-related sanctions imposed by the US for co-founder Gennady Timchenko’s supposed association with Russian President Vladmir Putin.

In March of 2014, Gennady Timchenko sold his 43-percent stake in Gunvor, prior to the announcement of sanction. While the move allowed the company to continue trading, the strategy effectively severed the firm’s relationship with Timchenko and Russia by association.

“In the current environment, the Russians were not going to allow such an important asset to be held by a foreign-owned company. It was a matter of finding a Russian buyer with the wherewithal and liquidity in the current environment to pay a fair price,” University of Houston finance professor Craig Pirrong said, as reported by The Financial Times.

 

For more news and information on Russia, click here.