Vitol to acquire $1.65 billion stake in upstream Africa projects in Eni deal

(Bloomberg) – Vitol Group agreed to buy into more Eni SpA assets in Africa as the trading giant taps bumper profits to beef up its oil and gas portfolio.

Vitol will acquire stakes in projects in Ivory Coast and the Republic of Congo for at least $1.65 billion, according to a statement on Wednesday. The deal deepens the company’s longstanding relationship with Eni in West Africa, where they’ve partnered in oil and gas producing assets in Ghana. When completed, the overall value of the transaction could reach $2.7 billion, an Eni spokesperson said.

It’s the latest sign of how big commodity traders like Vitol are taking on more assets as they look to deploy vast cash reserves amassed following Russia’s invasion of Ukraine that sparked wild price swings. They’re also looking to shore up margins that are now easing as market volatility wanes and competition from producers and hedge funds increases. 

The strategy shift means that what were historically lean merchant trading businesses are fast transforming into global multi-asset portfolios encompassing energy processing, distribution and even ownership of upstream production where oil and gas are pumped out of the earth.

Vitol, the largest independent oil trader, has also been striking deals for rival Noble Resources, refiner Saras SpA and fuel stations in Turkey and South Africa.

Its latest acquisition comprises two expansion projects. One is a 30% interest in the Baleine oil and gas project in Ivory Coast that’s slated to reach 150,000 barrels of oil and 200 million cubic feet of gas a day. Another is a 25% stake in Congo LNG, which is already exporting but is expected to rise to 4.5 billion cubic meters of gas exports a year by the end of 2025.

That adds to Vitol’s current equity production of around 70,000 barrels of oil equivalents coming from its Ghana joint venture with Eni and shale oil and gas in the U.S., according to a Vitol spokesperson.