Exxon Mobil Corp has pushed further into energy trading, as it’s built a group of experience traders worldwide and is beefing up systems of risk-management to increase profit, said people familiar with the company.
This is a big change for a company that has separated itself from rivals through limiting its previous activity due to concern of being accused of market manipulation.
It is now aiming to trade around the growing number of energy assets it has to get the highest prices it can for products and increase its earnings.
Greater trading could add in excess of hundreds of millions of dollars to its annual earnings from its buying and selling for fuels and crude, but that does not come without problems, including more risk.
Exxon expects it will add one million barrels daily to its output during the next few years as new fields and refineries’ expansions launch, giving it additional assets to trade.
Last year Exxon retained former trader John Masek to consult on trading of gasoline. Earlier in 2018, Exxon hired away four specialists in the gasoline market from Phillips 66.
Earlier in June, Exxon hired Nelson Lee a former trader with NHP Billiton as its international crude trader, said those familiar with Exxon.
During 2014, Lee was the orchestrator of the first-ever exports of crude by BHP by maintaining lightly refined oil that met criteria to be an exportable product. Those deals were a big help to the ushering in the end of the prohibition in the U.S. on crude exports more than one year later.
Exxon also has added crude, liquefied natural gas and products specialists to its offices in Singapore and London.
CEO Darren Woods has a goal of increasing Exxon’s profit and its appetite for risk through a measured pace, sources have said. The operation in the U.S. is run from a Spring, Texas trading floor that has grown to over 70 workers that will handle things from gasoline to Canadian crude and jet fuel to diesel.
One industry analyst said that trading at Exxon has been looked at as being a four-letter world. He added that Exxon has drawn the majority of its top managers with engineering backgrounds, and not financial ones, a change in that trading policy would be transformational for the company.