Brightoil to hire Singapore, U.S. traders; delay on Geneva
The move is part of its plan to become a supplier to the world's top energy consumer China and grab a slice of its massive 5 million barrel-per-day crude import market.
"Moving into financial year 2013, we plan to strengthen our crude oil team and start our crude oil trading business," Danny Tan, executive director and chief financial officer, told reporters in an earnings briefing on Tuesday.
Brightoil - which also owns oil tankers and storage facilities in China and overseas - will add staff in Singapore before the United States, he said, ruling out any plans to close down the company's Houston, Texas office.
Uncertainty surrounded Brightoil's U.S. plans after Vince Matassa, who oversaw operations and logistics for the company's trading business in the United States and the Caribbean, resigned in June.
The Houston office will function as a regional office for trading, providing market information to the overall company and upstream acquisitions, Tan said.
"Our team is still there and our office is still in place, and we look forward to adding new traders in the crude business because the U.S. is a crude sourcing and supply place."
But Brightoil is delaying its plan to expand in Geneva for one and a half years because of the need to control costs amid the eurozone economic woes, Tan said.
It had been seeking to turn Geneva into the headquarters for its European crude and fuel oil businesses, partly for tax purpose, he said. Before doing that, it needed to buy a property or enter a long-term property lease there.
"For Geneva itself, because of the economic slowdown so we do see a need for us to slow down our expansion plan in order to contain or minimize our costs for the time being," he said, adding Brightoil would move its two oil traders in Rotterdam to Geneva once the headquarter was set up.
The company reported a 76 percent fall in net profit for fiscal year ended June 2012. Company executives attributed the fall to sharply higher cost of sales and services, which surged to HK$69 billion ($8.90 billion) from HK$37 billion a year ago.
Brightoil's international trading and bunkering division recorded a 46 percent increase in sales volume to 13 million metric tons in the year ended June. But thin physical margins and rising operating costs weighed on profits, the company said.
Brightoil has more than 150 staff in its bunker oil trading team in Singapore, Houston and Europe, including traders, operators, analysts and mid- and back-office staff, compared with around 30 when the business was set up two years ago, Tan added.
The company has already hired at least three traders for the crude trading desk - former Royal Dutch Shell Plc trader Kevin Du, ex-Unipec trader Adrian Li Shiyong and derivatives trader Tham Mun Yang from Glencore International Plc - who joined between August and September.
The expansion into crude trading demonstrates the aspirations of Brightoil Chairman Raymond Sit - who is believed to enjoy warm ties with top officials in Beijing - to turn the company into a global energy conglomerate. ($1 = 7.7525 Hong Kong dollars)
(Reporting By Charlie Zhu, Writing by Manash Goswami; Editing by Himani Sarkar and William Hardy)
(charlie.zhu@thomsonreuters.com +852 2843 1649 Reuters Messaging: charlie.zhu.reuters.com@reuters.net)
(This story was refiled to correct spelling of executive's name in third paragraph)