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Glencore head of oil, Alex Beard, retires amid US probes

June 07/2019

MOSCOW (MRC) -- Glencore’s head of oil, Alex Beard, who helped make the firm one of the world’s top three oil trading houses, will retire this month, the company said in yet another management shake-up amid US probes into its activities, reported Reuters.

Glencore, founded by trader Marc Rich, has come under US scrutiny in the past year over its business in the Democratic Republic of Congo, where it produces cobalt and copper, and in Venezuela and Nigeria, where it trades oil and refined products.

Beard, 52, will be replaced by the head of oil marketing, Alex Sanna, 37, who was key in expanding Glencore’s refined products trading in recent years.

Beard’s move follows the retirement of other top allies of Glasenberg - Chris Mahoney, the long-serving head of Glencore’s agricultural business, and Aristotelis Mistakidis, the head of copper.

Glencore is worth USD44 billion and Mistakidis held a 3.2% stake in the company, worth USD1.4 billion at current prices, while Beard held a 2.5% stake worth USD1.1 billion.

Glasenberg is the largest shareholder of Glencore, with 8.8%, and built the firm from predominantly a trading house into a mining giant via its merger with Xstrata in 2012. He has said he may retire within the next three to five years.

Glasenberg, 62, revealed his retirement plans a few months after news broke about US investigations into Glencore.

Last July, Glencore said it had received a subpoena from the Department of Justice (DOJ) requesting documents and records on compliance with the U.S. Foreign Corrupt Practices Act and money-laundering statutes.

A previous US probe nearly destroyed Marc Rich in the 1980s when the United States accused the company of "trading with the enemy", Iran. It indicted Rich, who was pardoned years later by President Bill Clinton in 2001 during Clinton’s last days in office. Rich died in 2013.

Sources told Reuters the current DOJ investigation was focusing on the role of intermediaries and how they helped Glencore obtain contracts, including in oil trading.

In April, Glencore said the US Commodity Futures Trading Commission was also investigating whether the company and its units may have violated certain regulations through “corrupt practices".

The company said that probe was at an early stage and had a scope similar to that of the DOJ investigation.

Oxford-educated Beard joined Glencore in 1995 from BP, the biggest trading desk at that time, and became head of oil in 2007.

He embarked on expanding the firm into upstream, something trading houses had rarely done before, but the venture into Chad and Equatorial Guinea led to writedowns of over USD700 million.

Glencore’s traded oil volumes fluctuated between 4.5 and 6.0 million barrels per day in recent years - on par with rival Trafigura but behind the world’s top trading house, Vitol.

Last year, Glencore’s volumes shrank 17% because of unfavorable market conditions.

Sanna’s trading division will continue to report to chief executive Ivan Glasenberg, but oil assets, previously under Beard, will be transitioned to Peter Freyberg, the head of industrial assets, Glencore said on Monday.

Sanna, who studied economics in France, holds a master’s degree in international trade from Pantheon-Sorbonne University in Paris.

As MRC wrote before, in September 2018, South Africa’s competition watchdog approved Glencore’sroughly USD900 million bid for Chevron’s local and Botswana assets on Thursday, bolstering its chances of scuppering a rival bid from China’s Sinopec. Chevron agreed in 2017 to sell its stake to state-owned Sinopec before miner and commodities trader Glencore swooped in after reaching a deal with minority shareholders, who backed it and exercised preemptive rights on the sale.
Author:Margaret Volkova
Tags:crude and gaz condensate, BP Plc, Chevron, Glencore Grain, Sinopec, USA.
Category:General News
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