* Conoco eyes entry into new trading markets
* Reorganization of supply arm designed to support growth
* Move mirrors trading of big rivals like BP, Shell
By Robert Campbell
HOUSTON, Jan 28 U.S. oil major ConocoPhillips
Co (COP.N) wants to grab a bigger chunk of global oil trading,
including markets where it has not normally been active, three
people familiar with the firm's plans said this week.
The planned expansion of its worldwide trading activities
was a major part of the motivation of the recently disclosed
reshuffling of its trading arm, which saw the bulk of the
company's risk-taking trading centralized in London.
"We're looking at every tender now and we want to play a
role in those where we weren't present before," said a
The overhaul will take the Houston-based company into
markets where it does not have significant oil production or
processing assets, including both crude oil and refined
ConocoPhillips declined to comment on its trading
This vision of broadened trading activities would put
Conoco into the same league as the other major oil companies,
which already operate sophisticated worldwide trading arms that
aim to wring profit out of the daily flows of oil between
different parts of the world.
Supermajors BP Plc (BP.L) (BP.N) and Royal Dutch Shell Plc
(RDSa.L) have long fattened profits by taking advantage of
dislocations in regional oil markets to move cheaper oil to
places where prices are higher.
The current contango structure of the oil futures market,
where prices for oil to be delivered later in the year are
higher than those earlier in the year, has also helped bolster
many companies' bottom lines, including Conoco, by making it
possible to earn a profit by buying crude oil for storage while
selling higher-priced futures to lock in gains.
The brutal environment for oil refiners, which led to
Conoco's downstream unit bleeding $215 million in the last
quarter of 2009, is adding a sense of urgency to the drive to
restructure trading operations at many oil companies in a bid
to find profits and reduce costs.
Other market participants are already noticing Conoco
taking a more aggressive role in the Americas where it has the
bulk of its refining and marketing assets.
"They're making some bigger moves in the U.S. and other
markets. They're more prominent than before," said a U.S. crude
U.S. market sources say Conoco has been among the leaders
of an attempt to kick start over-the-counter trading against
the Argus Sour Crude Index, the new benchmark selected by Saudi
Arabia to price crude oil shipments to American customers.
(Reporting by Robert Campbell; Editing by Lisa Shumaker)