Reuters posted a story overnight that Exxon Mobil, the “largest non-trading energy company in the world”, is going to shed that title and start actively trading around their huge physical resources. From the Reuters story:
Exxon Mobil Corp. is pushing deeper into energy trading, building a global cadre of experienced traders and beefing up risk-management systems to lift profit, according to executive recruiters and people familiar with the business…
Exxon last year retained John Masek, a former trader at Swiss-based Glencore (GLEN.L), the world’s second largest buyer and seller of petroleum, to consult on gasoline trading. Earlier this year, it poached four gasoline market specialists from refiner Phillips 66 (PSX.N).
This month, Exxon hired former BHP Billiton Plc (BLT.L) trader Nelson Lee as an international crude trader, the people familiar with the matter said. In 2014, Lee orchestrated BHP’s first-ever crude exports by maintaining the lightly refined oil met criteria for an exportable product. The deals helped usher in the end to a U.S. prohibition on crude exports more than a year later.
The company has also added crude, products and liquefied natural gas specialists to London and Singapore offices. It recently hired Paul Butcher, a trader who has worked at BP Plc (BP.L), Glencore and Vitol, to advise on North Sea markets and accounting for trading transactions.
Given the sourcing – “executive recruiters and people familiar with the business” – its interesting that beyond the personnel additions, Reuters also mentioned that the company was looking at “at least two developers of risk-management software” and singled out Allegro and Enuit. Its well known in the industry that Allegro is the incumbent (having been in use there for years) and would likely have the upper hand for managing the expansion of Exxon’s trading activities. And while I’m not surprised that Enuit is also being looked at, I’d be shocked if they were the only ones Exxon was reviewing in this process. This could be a very big deal…and this market could really use a very big deal these days.