June 21, 2012:

Russian billionaire Gennady Timchenko wants his fast-growing oil trading house Gunvor to expand production and refining and get into other fuels to emulate top global players Glencore (GLEN.L) and Vitol. Gunvor bought its first oil refineries in Europe this year and Timchenko, a co-owner, said it would expand further both abroad and at home. He denied he had fallen out with Igor Sechin, Russia's former top state energy official who now runs its biggest oil firm Rosneft. "Like other big trading companies we are gradually turning into, if not a fully vertically integrated company, then something very similar," Timchenko said in a rare interview. The world's top commodities trader Glencore, started by oil trader Marc Rich as a pure merchant business, has grown into one of the world's largest oil, coal and metals conglomerates, and last year raised over $10 billion in a public share offering. Gunvor has achieved even more spectacular growth, with annual revenues rising to over $80 billion from just a few billions over the past decade. Several Russian opposition figures have suggested the rapid rise was due to close ties between Timchenko and President Vladimir Putin. Both men have denied the allegations, with Putin saying he had known Timchenko a long time but denying he ever helped him build the Gunvor empire. Timchenko has given only a couple of interviews over the past decade. He says he will have to put up with the idea that speculation will continue to surround him for years. "What can I do about it? I have to live with it ... I think it is unlikely to change in my lifetime," the billionaire, wearing a classic dark suit, said in the lobby of a luxurious hotel in St Petersburg.

Putin's home town is hosting the annual International Economic Forum, the country's main show for foreign investors, and several top Russian bankers and businessmen came to shake hands with Timchenko during the interview. "At some point I read Vladimir Vladimirovich (Putin) has a 75 percent stake in Gunvor. What a lot of nonsense!" said the silver-haired Timchenko, who kept a very low profile until a few years ago. Gunvor's shareholding structure has not changed over the past years, he said, adding that he himself owned just over 46 percent, chief executive Torbjorn Tornqvist 46 percent and management the rest. Gunvor generates net profit of between $300-$400 million a year on revenues of around $86 billion, Timchenko said. By comparison, the world's top trader Vitol had revenues of $297 billion in 2011 and No.2 trader Glencore had revenues of $186 billion.

NO DISPUTES WITH SECHIN

Timchenko has both Russian and Finnish citizenship and the Geneva-based firm has for several years been a leading exporter of Russian oil under term deals with companies such as state-owned Rosneft (ROSN.MM), and private Surgut and TNK-BP. At one point Gunvor handled as much as 40 percent of the overall seaborne exports of the world's largest oil producer. But over the past two years it has ceded its leading role to Royal Dutch Shell (RDSa.L) and Glencore, prompting media speculation that Timchenko had fallen out with Putin's main energy negotiator Sechin. "We have neutral, normal, working relations ... The newspapers are writing that we are quarreling - it is wrong. We don't have any problems," said Timchenko. He also said Gunvor was not yet ready for very large acquisitions. The comment followed market speculation Timchenko could try to buy 50 percent in TNK-BP (TNBP.MM), Russia's No.3 oil firm, after British oil major BP (BP.L) put it up for sale amid a dispute with its partners, a consortium of four Soviet-born billionaires.

"It (TNK-BP) is a very big company, we are not ready for such big purchases, we did not even discuss this subject," Timchenko said. "We have become active in buying oil refineries now as we think that now is the right time to enter oil refining." Gunvor has this year bought bankrupt Swiss oil firm Petroplus's refinery in Ingolstadt, Germany, and a plant in Antwerp, Belgium. Timchenko said Gunvor may look at other "interesting possibilities" if they arose and would expand into coal and other energy industries. "But from the point of view (buying) large companies - we are not ready. It is too early for us, we need to grow further first," the billionaire said.

By Reuters