Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Gunvor chief executive Torbjörn Törnqvist has said he wants to retain control of the business within his family following the breakdown of a potential deal with Abu Dhabi’s state oil group.
Talks with the Abu Dhabi National Oil Company over a sale of all or part of the commodity trading house started last year but unravelled in March after disagreements between the two sides over the size of the deal.
In an interview with the Financial Times, Törnqvist said he was happy to keep the independence to shape Gunvor’s expansion and that the company’s growth over the past three years meant finding a strategic investor was no longer essential.
While Törnqvist turns 70 next month, he said he was in no rush to retire and that with his 33-year-old son Fredrik playing a growing role in the company, running the Geneva-based trader’s London office and its renewable energy investments, it would be “best” for the family to retain control.
“Like many people in our family situation, if you can keep it like that it’s always the best.”
Törnqvist, who controls 85 per cent of Gunvor’s shares, said its focus was now on deploying the vast profits it has made over the past three years as the Covid-19 crisis then Russia’s full-scale invasion of Ukraine stoked huge volatility across energy markets — and big returns for traders.
The company’s equity value has risen to $6.1bn from $2bn in 2019, while its headcount has expanded by 200 to 1,700 in the past three years, including a number of senior trading hires such as head of crude Benoit Roulon and Jade Touzni, who leads origination.
Törnqvist said the company’s growth meant his long-held desire to find an external investor had waned, as the motivation for attracting outside money had always been to fund expansion.
While he would not comment directly on the breakdown in talks with Adnoc, which had once looked likely to take a significant stake in the company, he indicated that the prospect of giving up control had never sat easily with him.
“We are a long way away from being a small company these days,” Törnqvist said. “Today our concern is how best to deploy the cash and the profits we have built up over the years, and we are in a strong position to invest with our balance sheet.”
Törnqvist said that alongside looking for investments typically sought by trading houses such as ports, storage hubs and tankers, Gunvor is considering further investments in the energy transition. It relaunched a metals trading desk this summer given expected growth in demand from electric vehicles.
The focus on the energy transition has raised questions in the industry over whether Fredrik will one day succeed his father as chief executive, although there are other senior partners who may take the top job.
Törnqvist said the company was also exploring upstream investments in oil and gas production for the first time.
Gunvor would not look to operate production assets, he added, but was interested in stakes that would allow it to secure additional oil or gas volumes to bolster its trading.
“We can see it looks attractive,” he said, adding that he did not think the energy transition was happening fast enough to significantly curtail oil demand “for the foreseeable future”.
“We can do pre-financing but we’re also now ready to take equity if it fits with our trading model.”
Törnqvist said tensions emanating from the Israel-Gaza crisis had added about $5 a barrel to the price of crude, with international benchmark Brent rising to near $93 a barrel this week.
“There is clearly a fear factor in the market right now, should this crisis spread in a very sensitive region. But at the moment we don’t have any changes in the supply. No one wants to see this spread, and I think that includes Iran and others in the Middle East.”
But he added that without a significant supply disruption he did not think demand was strong enough to boost prices above $100 a barrel, with much of oil’s recent strength caused by production cuts among the Opec+ group.
“Demand is not necessarily supporting $100 oil, it’s the actions of the cartel.”
