UPDATE 1-Mercuria sees strategic stake deal in 6 months

Fri Jan 25, 2013 12:43pm EST

By Dmitry Zhdannikov

DAVOS, Switzerland Jan 25 (Reuters) - Mercuria is seeking to sell up to a fifth of itself to a strategic investor within the next six months and is also looking to increase partnerships with China, its head said on Friday.

Marco Dunand, president and chief executive of Swiss-based Mercuria Energy Trading, told Reuters the company has grown rapidly to become one of the world's top five energy traders expanded again last year.

"There is more interaction between various energy sources. In order to properly understand it, you need to trade across all energy sources," he said on the sidelines of the world economic forum in Davos.

The firm's turnover was around $100 billion in 2012 and it traded 156 million tonnes of crude oil and products. In 2011, the revenue was around $75 billion and $47 billion in 2010.

Non-oil business represented 50 percent of Mercuria's business and the regional split of business was roughly a third between Europe, Asia and the United states, he said.

He also said the company was looking to expand business and partnerships with China after the sale of half its terminal business in Europe to China's Sinopec. The two are now looking at partnering at a terminal in China.

Dunand also said oil prices were unlikely to fall below $90 per barrel in the next couple of years, held in check by the marginal cost of producing oil and by supply from the Organization of the Petroleum Exporting Countries.

"For the foreseeable future, by that I mean a couple of years, $90 per barrel will be the floor for the oil price, capped by the marginal production cost, while OPEC will play a swing role," Dunand said.

Further ahead oil could rather face downward pressure as the cost of fracking, breaking up rock formations to extract the oil and gas they contain, becomes cheap and OPEC's spare capacity will rise.

"Saudi Arabia has the capacity to cut further to support prices but if the shale oil revolution starts getting outside of the U.S. and particularly in China and Russia they will have to rethink that strategy. They cannot continue cutting eternally to the benefit of the others," he said.

Tensions around Iran have been supporting the prices in the past years, but the impact might diminish as the United States has said it was ready to release fuel from its Strategic Petroleum Reserve to protect the world economy should oil prices spike.

"With a potential SPR release and OPEC spare capacity rising, Iran's production can in theory fully disappear from the market. Therefore, Iran might have to start negotiations," Dunand said.

He also said new trends in the oil industry were constantly emerging at a great speed because of the U.S. shale revolution. "We have see gasoline fixtures from Houston to Libya. It becomes very interesting as the U.S. emerges as a very large products exporter," he said.