- Title: RUSSIA: Rosneft hires former Morgan Stanley execs to advise Sechin
- Date: 12th November 2012
- Summary: MOSCOW, RUSSIA (FILE) (REUTERS) VARIOUS OF ROSNEFT HEADQUARTERS VARIOUS OF ROSNEFT PETROL STATION
- Embargoed: 27th November 2012 12:00
- Location: Russian Federation
- Country: Russia
- Topics: Business,Industry,Politics
- Reuters ID: LVA9OBR48D1DRZOMYX72NCGLMKIB
- Aspect Ratio:
- Story Text: Rosneft has appointed a team of Morgan Stanley veterans led by former co-president Walid Chammah as advisers to Rosneft President Igor Sechin, the Russian national oil company said on Monday (November 12).
Two top executives from Morgan Stanley's Moscow office, Rair Simonyan and Elena Titova, have also been hired to advise Sechin, who has launched a series of international exploration deals and a $55 billion takeover of BP's Russian joint venture, TNK-BP.
Chammah and Simonyan will join the board of a Rosneft-owned bank, the Russian Regional Development Bank, aiming to develop it into a universal financial institution, Rosneft said in a statement.
Chammah told Reuters that the advisers would develop an energy trading platform as part of a mandate to create a new financial institution out of Rosneft's scattered financial assets.
"Clearly, we would like to have a platform where we are able to provide product services to Rosneft and other users or consumers of the product to be able to hedge and to be able to deliver the product efficiently to them," Chammah said.
International banks, which had piled into trading oil, metal and agricultural commodities both as physical volumes and paper, have been forced into a retreat by the 2008 financial crisis and tightening U.S. regulation.
Morgan Stanley itself may sell off part of its commodities trade business to its management or a Qatari investment fund to reduce the impact of new restrictions on derivatives trade by banks.
"The current banking industry is facing tough regulations regarding Basel 2 1/2, Basel 2.5 or Basel II or the Dodd-Frank regulation regarding prop trading. That will open up opportunities for third parties, either for financial investors in the form of hedge funds, or independent oil traders like Glencore and others, or new entrants like ourselves who are an oil company who would like to participate in the market by having the ability to physically deliver the supply and actively participate in the derivatives side of it to basically be more prosperous and be more successful," Chammah said.
Chammah served as co-president of Morgan Stanley from 2007 to 2011. A fixed income specialist, he had overseen Morgan Stanley's commodities trading business, which during peak years brought in upwards of $3 billion.
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