Oil trader Litasco hires traders, lines up credit to rebuild Americas arm, sources say
Litasco hires experienced traders in Americas after rebuilding credit lines, sources say
Efforts part of broader restructuring as Litasco distances from Russian parent Lukoil - source
Litasco has secured more than $2 Bln in open credit lines, also opened letters of credit - sources
Hired former Gunvor trader Dmitri Sinenko as managing director for Lukoil Pan Americas- sources
By Shariq Khan
NEW YORK, Oct 29 (Reuters) -Swiss-based energy trader Litasco is hiring experienced traders and has lined up credit lines to revive its business in the Americas that withered after Russia invaded Ukraine in 2022, three sources close to the company said.
Neither Litasco nor its Russian parent, oil producer Lukoil PJSC, were included in the U.S. sanctions imposed on many Russian entities in response to the conflict in Ukraine. Lenders around the world cut financing to Litasco anyway, to avoid unwittingly falling foul of other sanctions and to avoid any reputational damage for facilitating Russian oil trade.
That reduced the company's open credit lines to near zero, impeding its ability to trade cargoes on the international market, the sources told Reuters, speaking on condition of anonymity as they were not authorized to speak publicly.
Litasco's efforts to revive American operations come amid a broader restructuring and as the company distances itself from its Russian parent, one source said. Litasco operates independently of Lukoil, two of the sources said. Lukoil Pan Americas, the U.S.-based unit of Litasco, does not deal in cargoes of Russian origin, the three sources said.
Reuters was unable to reach Lukoil Pan Americas by phone or email. Litasco said it does not comment on specific business, commercial, political or employee-related matters. Lukoil PJSC did not answer Reuters requests for comment.
Litasco has secured more than $2 billion in open credit lines for trade, the three sources said. It has also opened letters of credit to work with counterparties, one source said.
"They will likely keep looking to expand their credit lines but this puts the company in a solid financial position to re-activate the business which was virtually dormant for the past two years," one source said.
The company is focusing on rebuilding its oil and fuel trading operations in North, Central, South Americas and the Caribbean, one of the sources said. Litasco's Americas unit has been headquartered in Houston, Texas, since it was set up in 2013.
Lukoil Pan Americas will be backed by a parent guarantee, meaning that Litasco in Switzerland would make any contractual payments if the U.S. arm is unable to do so, the source added.
Litasco has hired Dmitri Sinenko, considered by peers and rivals to be one of the most profitable U.S. gasoline traders of the past decade, to serve as managing director of Lukoil Pan Americas and lead its turnaround efforts, the sources said.
Sinenko is being joined by long-term associate Sushant Koduru, who will handle the gasoline and diesel trading books for Lukoil Pan Americas, the sources said.
Sinenko and Koduru are expected to go on a hiring drive in coming months to rebuild the company's talent pool, which shrank from over 80 employees prior to Russia's war on Ukraine to around 16, the sources said.
Among employees who left Lukoil Pan Americas since the conflict started in Ukraine is Gustavo Giron. Giron left to become head of business development at rival trading firm Mercuria last year after occupying the same role at Lukoil Pan Americas, according to two sources close to Giron.
Sinenko, Koduru and Giron could not be contacted for comment.
Sinenko started in the new role on Tuesday and Koduru will begin in November, the sources said. Both Sinenko and Koduru join Lukoil Pan Americas from Gunvor. Prior to Gunvor, both were at Asian trading firm Noble Group. Gunvor declined to comment.
Reuters earlier reported Sinenko was in talks to join Litasco, but details of his new role were not available and are being reported for the first time.
The trading community in Houston has grown with booming oil and gas output in the United States as a result of the shale revolution. Swiss trading firm Gunvor last year said it was expanding operations in the U.S., and in May Reuters reported that UAE'S ADNOC is planning to set up a U.S. trading desk.
Reporting by Shariq Khan in New York; Editing by Sonali Paul
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