Morgan Stanley appointed Nancy King as head of its oil-liquids operations and made several senior appointments after the bank agreed to sell its global oil merchanting business to an OAO Rosneft subsidiary.
King, formerly chief risk officer at Morgan Stanley’s commodities division, will lead its remaining oil liquids business from New York, according to a memo obtained by Bloomberg News. She reports to Colin Bryce and Simon Greenshields, the bank’s joint heads of commodities trading in London and New York. Hugh Fraser, a Morgan Stanley spokesman in London, confirmed the contents of the document.
Banks including JP Morgan Chase & Co. and Morgan Stanley are exiting or reducing their activities in commodity markets amid lower revenue and more scrutiny from regulators. Commodities revenue at the 10 largest investment banks dropped 18 percent to $4.5 billion last year from $5.5 billion in 2012, according to analytics company Coalition Ltd. in London.
Morgan Stanley’s sale to Rosneft, Russia’s largest oil producer, includes inventory, storage deals, sale and supply agreements and freight shipping contracts, the bank said in a Dec. 20 statement. It didn’t disclose financial terms. About 100 front-office executives in the U.S., U.K. and Singapore will move to Rosneft. That’s about one-third of Morgan Stanley’s commodities front-office personnel.
Of the remaining staff, Javier Bocos in London will become the bank’s head of oil-liquids trading and marketing in Europe and Singapore, according to the document. Jeffrey Sun will lead oil-liquids trading in the U.S. Bocos and Sun were heads of oil options in Europe and the U.S., respectively.
Brett Humphreys will become the department’s chief risk officer after serving as deputy CRO. Martin Mitchell will become head of regulatory affairs, adding to his role as the unit’s chief operating officer.
The Rosneft transaction is expected to close in the second half of this year and is subject to regulatory approval, according to Morgan Stanley’s Dec. 20 statement. The sale also includes the bank’s 49 percent stake in Heidmar Holdings LLC, which manages about 100 oil and chemical tankers.
Rosneft became the world’s largest publicly traded oil producer by volume after acquiring TNK-BP for $55 billion in March 2013.
Mercuria Energy Group Ltd. will probably announce a deal within the week to buy JPMorgan’s $3.3 billion commodities unit after the parties entered exclusive talks last month, according to two people with knowledge of the situation.