(Bloomberg) -- Gunvor Group Ltd. is borrowing $500 million to fund a new trading office in Houston as one of the world’s five largest independent oil traders makes its boldest move yet to diversify operations.

The company’s new Texas office will initially trade refined petroleum products, including gasoline and bitumen, as well as natural gas, Gunvor said Monday in an e-mailed statement. The office of about 10 people will be expanded to add a crude-oil trading desk. The loan came from a syndicate of banks led by a New York branch of Cooperatieve Rabobank UA and ABN Amro Capital USA LLC.

The opening of a first U.S. trading office comes after Gunvor shifted away from its Russian roots following the imposition by the U.S. of sanctions in March 2014 on co-founder Gennady Timchenko for his close ties to Vladimir Putin. The company, which has its main trading operations in Geneva, has also expanded in Singapore and boosted transactions in Africa and Latin America.

Competitors Vitol Group, Trafigura Group and Mercuria Energy Group have all increased trading out of the U.S. in recent years, profiting from the end of a four-decade ban on U.S. crude exports. Bloomberg News reported Gunvor’s plans to open the U.S. office in June, along with the hiring James Hutchinson, a former Valero Energy and Trafigura gasoline trader.

Selling Assets

Chief Executive Officer, Swedish national Torbjorn Tornqvist, agreed to purchase Timchenko’s 44 percent stake in Gunvor the day before the Russian was sanctioned in 2014. Gunvor, which itself has never been sanctioned and has long denied any links to Putin, has since scrambled to shore up relationships with its banks and trading counter-parties, some of whom were apprehensive about dealing with the firm.

Over the last year two years, Gunvor has sold the bulk of its Russian assets, including its majority stake in the Ust-Luga oil-products terminal. Asset sales helped boost Gunvor’s profit to a record $1.25 billion in 2015.

Founded 16 years ago by Timchenko and Tornqvist, a former BP trader, Gunvor got its start trading Russian oil and at one point handled about a third of seaborne crude exports from that country. Registered in Cyprus, Gunvor has sharply reduced its dependence on Russia in recent years. 

Americas Trade

Russian crude and oil products now account for less than 12 percent of the 2.5 million barrels a day that Gunvor trades. The company has said 40 percent of the crude it handles originates from North and South America, including the U.S. In March, Gunvor confirmed plans it would ship U.S. crude from Freeport, Texas to Panama for storage.

Tornqvist, who now controls about 70 percent of the company, received an “extraordinary restricted payment” after the Russian asset sales generated $1.7 billion, Gunvor said in August last year. A portion of those proceeds were used by Tornqvist as a final repayment to Timchenko for his Gunvor stake, a person familiar with the matter said in May.

Between 2009 and 2011 Gunvor operated a Houston office that came with its acquisition of trading house Castor. Gunvor later relocated its Houston-based traders to the Bahamas. 

To contact the reporter on this story: Andy Hoffman in Geneva at To contact the editors responsible for this story: James Herron at, Dylan Griffiths

©2016 Bloomberg L.P.