London: Several former traders from oil major Shell have set up trading house Atmin, backed by Afreximbank, to focus on African oil trading, two trading sources familiar with the development said.
The move takes place as oil majors and Western banks retreat from Africa and the continent is facing a decline in oil and gas production due to under-investment, while also spending $30 billion annually on fuel imports.
Billions of barrels of oil and gas in Africa are at risk of being stranded as a race among global producers is heating up to extract as many resources as possible before the energy transition cuts demand for fossil fuels.
Atmin, which stands for Africa Trading Minerals, will be run by Ajay Oommen, the sources said. Oommen worked for 17 years at Shell including as head of the low sulphur crude desk, which traded up to 1.5 million barrels per day of oil, including from Africa.
Atmin will also hire Vikram Thakur, who worked for 18 years at Shell, including in business development, trading origination and structured finance, as well as Joseph Kanaan, a trader at Shell for 11 years.
Dubai-based Atmin will have around 15 employees. It will start with crude and then expand into oil products and minerals, the sources said.
Afreximbank will be a controlling shareholder at Atmin, while employees will own some 15% of the firm, the sources said.
Afreximbank did not reply to requests for comment.
In a statement on Monday, Afreximbank said: “Afreximbank-affiliated trading entity Atmin will … participate actively in the trading and financing activities of the leading African oil trading companies with long-term relationship with Afreximbank.”
Afreximbank was set up in 1993 to fund and promote African trade and is owned by African governments, as well as private and institutional investors from inside and outside Africa.
The bank said on Monday it had launched a $3 billion revolving trade financing programme to help fund purchases of fuels by African and Caribbean buyers, including from African refineries. (Additional reporting by Patrick Werr. Editing by Mark Potter)
