Trader BB Energy expands commodity finance team

Fri May 18, 2012 1:54pm EDT

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* Looks to syndicated loans, bonds for expansion

* Has hired senior finance executive from Trafigura

* Says will expand crude oil trading this summer

By Emma Farge

GENEVA, May 18 (Reuters) - BB Energy said on Friday it has hired three commodity finance specialists as the energy trading house seeks to tap alternative sources of funding for downstream acquisitions and its expansion in crude oil trading this summer.

Many small to mid-sized trading houses have seen their credit lines trimmed or cut in the last year as the traditional kings of commodity trade finance, the European banks, have struggled to raise dollar funding.

The diminished availability of funding has coincided with a growing appetite among energy trading houses to acquire physical assets like storage and processing plants to increase the flexibility of their trading books and boost profits.

BB Energy's head of business development, Jas Grewall, said that new banks had provided additional credit lines but the firm would need fresh sources of financing for downstream oil purchases like storage and distribution networks across Africa and the Middle East.

"The idea is to expand our credit lines by bringing in more diversified, experienced people. We're starting to look at new means of getting finance like syndications and bonds," said Grewall.

He declined to comment on the specifics of upcoming purchases.

BB Energy is a global energy trader that employs around 100 people and owns storage assets in Lebanon and Turkey.

HIRING SPREE

Originally a family-owned firm that now has trading offices in Dubai, Beirut, London and Singapore, BB Energy has added around 12 new posts over the last year.

These include a new chief financial officer, Riccardo Greco from oil trader Trafigura, as well as a new director of trade finance, Hatice Tulum, from Britain's Balli Group and Jean-Michel Karagah from BNP Paribas, the company said in an emailed statement to Reuters.

The firm, which doubled its trading volumes last year to 9 million tonnes partly due to growing trade with Libya, will need additional financing for its growing crude trading book.

Last month, BB Energy hired the head of oil trading at Eni Alessandro Liberati and on Friday it said it also hired trader Mohsin Kabir from insolvent refiner Petroplus.

The main focus of its crude oil trading activities will initially be the Mediterranean, with the possibility of future expansion into the West African market, Grewall added. (Reporting by Emma Farge)

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