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Trading houses lure top talent from BP, Shell
Jul 11, 2024 5:09 AM

LONDON (Reuters) - Several high-profile energy traders have in recent weeks quit oil majors for trading houses, multiple sources told Reuters on Thursday, as talent follows assets swapping hands and as trading houses ramp up bonuses.

Trading houses such as Vitol and Trafigura have acquired tens of billions of dollars worth of assets from oil majors over the past decade, using profits which jumped since 2022 due to energy markets' volatility caused by Russia's war in Ukraine.

Privately-owned commodities trading houses have snapped up refineries and terminals as oil majors come under increased pressure from shareholders to invest in greener energy.

"We build our asset base while majors have less and less assets to trade around. Naturally, traders leave to join us," said a top executive at a major trading house.

The world's largest and most profitable oil trader Vitol has hired Shell's head of LNG marketing Mehdi Chennoufi, crude trader Lionel Ader from French oil major TotalEnergies and Shell's West African crude trader Michas Barry, three sources familiar with the developments said.

Vitol also hired one of Trafigura's key crude traders Jordan Dowle, who specialised in North Sea and Mediterranean markets, the sources said.

Trafigura has hired at least six traders from oil majors, according to three separate sources, including BP's London-based crude originators Jason Breslaw and Tamoor Ali.

The hiring follows recent high profile departures from BP and Shell.

BP's head of trading Sven Boss-Walker left the firm after 25 years, Reuters reported last month. BP staff were told he is joining an independent start-up, according to a trading source.

Trading house Mercuria earlier this year hired Shell's head of LNG Steve Hill. Last year, Mercuria hired Bill McGrath from Shell as managing director for low carbon.

John Lo, who was previously manager at Shell LNG trading and refined products, has left to specialise in carbon credit, two separate sources said.

Vitol, Trafigura, Mercuria, BP and Shell declined to comment.

The hiring spree by trading houses continues a trend which started a decade ago when top commodities traders jumped ship from banks such as Goldman Sachs, Morgan Stanley and JP Morgan after the U.S. imposed caps on proprietary trading following the Lehman Brothers and Bear Stearns collapses.

Most traders at Vitol, Trafigura and others get their pay as a percentage of profit of their book, according to at least a dozen trading sources. It is not unusual for a top trader to earn millions of dollars during a successful year, according to sources close to the firms.

Vitol, which makes many of its senior traders partners in the company, paid $5 billion in dividends last year and rival Trafigura paid $5.9 billion. That resulted in payments of dozens of millions of dollars to some partner-shareholders, according to the sources.

Vitol and Trafigura declined to comment.

BP, Shell and other majors struggle to match such bonuses, the sources said, because as publicly listed companies they face bigger scrutiny by shareholders. BP's and Shell's CEOs Murray Auchincloss and Wael Sawan took home just slightly over $10 million each in salary and bonuses last year.

(Additional reporting by Robert Harvey and Ron Bousso;Editing by Elaine Hardcastle)

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