Jorge Montepeque, who helped shape the way oil prices are assessed globally, is to leave his job.
The 58-year-old global director of market reporting at Platts, a publisher of energy and commodity prices, will leave at the end of the year, the unit of McGraw Hill Financial Inc. said by e-mail on Wednesday. Guatemala-born Montepeque went on immediate leave, two people familiar with the matter said. He will continue to help manage a transition, Platts said.
Montepeque insisted in the early 1990s that traders had to buy and sell oil during a 30-minute window if they wanted their trading to form part of benchmark price assessments. The approach was extended to the North Sea oil market, affecting a benchmark used to price millions of barrels of crude sales globally each day. Platts also publishes prices for other commodities, including fuels and metals.
“It is beyond dispute that he has created many of the world’s most important commodity benchmarks, on which the industry relies so much,” William Bathurst, Singapore-based credit manager at Peninsula Petroleum Ltd. who previously worked at Platts for five years, said by e-mail.
Global pricing benchmarks across several markets have drawn regulators’ scrutiny following investigations into manipulation of Libor and currency markets. The European Commission raided the offices of Platts and three of the region’s largest oil companies in 2013.
Montepeque’s departure was for “internal” reasons had “no connection whatsoever” to any regulatory probes, spokeswoman Kathleen Tanzy said by e-mail.
Platts is making an organizational change in its markets-reporting group, which supports and develops methodology for price assessments, the company said. Price reporting will be overseen by existing departmental heads and Martin Fraenkel, who will become chief content officer on June 1.
Montepeque left his mother and three sisters in Antigua, Guatemala in 1976 to study economics at Hunter College in New York. He paid his way through school as a short-order cook at a Japanese restaurant in Manhattan’s East Village and working at PIRA Energy Group, a New York-based consultant.
He joined Platts in 1988 as a reporter calculating prices for benzene, a product used to make packaging and textiles, and ethylene, an ingredient in plastics and detergents.
“The company of course is losing a great asset,” Johannes Benigni, managing director of consultants JBC Energy GmbH, who’s known Montepeque for 15 years, said by phone. “At the same time, I think Platts has known the special role that Jorge’s in and has already for many years built up a team of people around him that allow the company to continue doing their business even in the case he were to leave.”
Montepeque started changing the way Platts priced oil in Singapore in 1992. He decided the company would only accept firm bids, offers and trades from named companies reported during the daily 30-minute window known as the market on close. Instead of an average, the company would calculate a price that reflected the value at the end of the half-hour. This assessment process is now used throughout the world in contracts for crude, refined oil products and power-plant fuel.
“Platts has become the key price reporting agency” because of Montepeque’s efforts, Ehsan Ul-Haq, senior analyst at London-based KBC Energy Economics, said by phone. “He has been a very important person for the oil industry,” introducing changes that solved some challenges in pricing North Sea oil, which includes international benchmark Brent crude, Ul-Haq said.
Montepeque isn’t expected to make any key pricing decisions, according to the two people with knowledge of the matter, who asked not to be identified.
In 2013, the European Commission sent investigators to seize computer records and documents from Platts offices. It also raided BP Plc, Statoil ASA and Royal Dutch Shell Plc, three of Europe’s largest oil companies, as well as Rotterdam-based Argos Groep BV. No charges have been brought against any of the companies. Tanzy, the Platts spokeswoman, said she didn’t know the status of that probe.
The U.S. Federal Trade Commission closed an investigation in October into the possibility of oil-price fixing, according to BP and Statoil.
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