BP Said to Appoint Dan Wise as Global Head of Crude Oil Tradingby and
Oil company relying on trading to offset lower crude prices
Wise replaces Donald Porteous who is retiring from BP in 2016
BP Plc appointed Dan Wise as its new global head of crude oil, one of the most powerful roles in the global commodities trading industry, according to three people familiar with the situation.
The appointment comes at a crucial time for BP, which is relying on its heft in energy trading to compensate for lower profits from oil production.
Wise, who will relocate from London to Chicago, replaces Donald Porteous, who plans to retire next year, according to the same people, who asked to not be identified because the information hasn’t been made public.
BP declined to comment. Wise didn’t respond to messages.
Although better known for their oil fields, refineries, and petrol stations, BP, Royal Dutch Shell Plc and Total SA are also the world’s biggest oil traders, handling enough crude and refined products every day to meet the demand of Japan, India, Germany, France, Italy, Spain and the Netherlands.
The trio’s supremacy in commodities trading is paying off this year as the bear market allows traders to generate higher returns by storing cheap oil today to sell at higher prices later and using lower prices to make more bets with the same capital.
BP Chief Financial Officer Brian Gilvary said in April that the London-based oil company made $350 million more than “normal” during the first quarter. Trading profitability returned to normal levels in the second quarter.
Wise, who is in his mid-30s and British, is likely to become one of the highest paid individuals at BP. Traditionally, the global head of crude pockets salaries and bonuses in excess of the Chief Executive Officer’s, one of the people said. BP CEO Bob Dudley was paid $15.4 million last year.
The retirement of Porteous was first reported by Reuters.
Wise will report to Paul Reed, the top executive at BP Integrated Supply and Trading, as the trading arm is known. The unit employs about 3,000 people in trading floors in London, Chicago, Singapore and several other cities
The in-house trading arms of the European oil companies take speculative positions from time to time, profiting from what BP describes as the “huge amount of information” about supply and demand that others do not have access to. BP has privileged information about flows into Cushing, the pipeline and storage hub in Oklahoma that serves as the delivery point for West Texas Intermediate oil.
BP hasn’t disclosed the profitability of its trading arm for a decade, when it said it made $2.97 billion, or about 10 percent of the company’s total earnings in 2005.