Morgan Stanley sells oil trading assets to Rosneft
Investment bank Morgan Stanley Friday announced plans to sell part of its commodity business to Russian oil giant Rosneft for an undisclosed sum.
The transaction covers Morgan Stanley’s “global oil merchanting” business, which engages in global storage, trading and transportation of oil and petroleum products.
While the deal includes physical holdings of oil and refined products associated with existing contracts, it does not include Morgan Stanley’s stake in oil pipeline and terminal company TransMontaigne, the bank said.
Morgan Stanley said it is “exploring strategic options” for the TransMontaigne stake.
The Wall Street bank also will continue to conduct oil trades on behalf of clients.
The deal comes amid indications the US Federal Reserve could shift policy and prevent banks and investment banks from holding physical commodity assets. JPMorgan Chase has also announced plans to market its commodity assets.
About 100 executives in the United States, Britain and Singapore will move to Rosneft as part of the transaction, Morgan Stanley said.
Russian state-controlled Rosneft is one of the world’s biggest petroleum companies, pumping more than 4.8 million barrels of oil-equivalent per day in the most recent quarter, more than US giant ExxonMobil.
The company’s torrid growth includes the integration of many of the assets of the dismantled Russian oil giant Yukos.
Morgan Stanley plans to seek approval for the transaction from the Committee on Foreign Investment in the United States, which assesses sales of US assets for national security issues, according to a person familiar with the matter.