Trafigura sells stake in Russia’s Vostok Oil project to Hong Kong-based trader Nord Axis


Independent commodity trader Trafigura said July 13 it has sold its 10% stake in Russia’s giant Vostok Oil venture to a privately-held, Hong Kong-based trading company Nord Axis for an undisclosed sum.

Trafigura first announced March 2 it was “reviewing options” over its equity stake in the Vostok Oil venture as pressure mounted on Western companies to distance themselves from Russian investments in the wake of Moscow’s invasion of Ukraine.

Trafigura said the sale of its Vostok stake, including the associated non-recourse bank debt, completed July 12 for an undisclosed price. According to the Hong Kong company directory, Nord Axis was incorporated Feb. 15 as a private company limited by shares type. No further information on the company was available.

The Rosneft-led Vostok Oil project, which will link up some of the company’s vast resources with the Northern Sea Route, is a development priority for Russia that will allow shipping to both European and Asian markets.

Trafigura last year paid Eur1.5 billion ($1.8 billion) of its own cash to help pay for the 10% stake in Vostok, which is valued at Eur7 billion ($7 billion). Vitol, the world’s biggest independent oil trader, also agreed to jointly buy a 5% stake in the Vostok Oil project with Mercantile & Maritime in 2021.

The Singapore-based trader has said it terminated commercial agreements with the structured entity that controls the 10% stake in Vostok on March 31. At that time, the unit was valued at a negative $610.1 million, compared with a positive $862.2 million on Sept. 30, 2021, the company said in an interim earnings statement.

Trafigura has said its 10% stake in Vostok Oil is a passive shareholding in which it has no operational or managerial input.

A number of producers and traders have announced plans to exit their Russian operations. Shell completed the sale of its retail stations and lubricants businesses in Russia to Lukoil May 25. Glencore has said it is reviewing its minority stakes in state-owned Rosneft and the parent company of Russian aluminum producer Rusal.