Dubai: Iraq’s state-oil marketer Somo and Russia’s Litasco have set up a joint trading company in Dubai to market crude, trading sources said, joining other Middle East producers that buy and sell oil to boost their incomes.
The new venture, Lima Energy, is establishing a team to work at the Dubai Multi Commodities Centre (DMCC), the sources said, adding that it would trade in Iraqi, Russian and other crude.
“Lima will lift the first cargo of Iraqi crude in May,” one source said.
Lima is modelled after Oman Trading International which began as a venture between Oman Oil and Vitol, the sources said. OTI is now fully owned by Oman Oil and trades Omani crude, products and LNG.
Up to 10 Somo members of staff, including its head of shipping, could be seconded to LIMA, one of the sources said.
Litasco, a unit of Russia’s Lukoil which develops oil fields in southern Iraq, is one of the world’s biggest traders. Iraq is the second-largest producer in the Organisation of the Petroleum Exporting Countries (Opec) after Saudi Arabia.
The Iraqi oil ministry said last month it has agreed with Litasco to form an oil marketing venture, but did not give details at the time.
Last week, Somo sold its first cargo of Basra Light crude via an auction on the Dubai Mercantile Exchange (DME), which could become a platform for price discovery. DME is now the marketplace for most Omani crude sold in Asia.
Other oil producers have set up commodities trading firms.
Saudi Aramco, the world’s biggest oil producing company, set up Aramco Trading in 2012 to market refined products, base oils and bulk petrochemicals.
Somo handles exports from areas under control of Iraq’s central government, but not exports from the northern region that is under Kurdish control. Somo’s average crude exports were 3.756 million barrels per day in March.
