According to Bloomberg, the company’s staff manipulated payments while concealing a mountain of overdue debts, a malpractice that continued for years without raising any red flags. Speaking privately, nine bankers have described the potential loss as ‘astounding’, considering Mongolia’s consumption of ~35,000 barrels a day is worth roughly $1 billion a year, or less than 0.3% of the oil traded by Trafigura.

“The key question, as always, is how quickly and effectively one learns from mistakes and implements corrective measures. Not merely by reshuffling or dismissing staff and launching a lengthy recovery process, but by strengthening the company’s governance, internal processes, and controls,”  said Jean-Francois Lambert, a consultant and former commodity banker.

Trafigura has grown into one of the biggest diversified commodities traders in the world: last year, the firm traded an average of 5.5 mn barrels of oil a day–the equivalent of the combined oil demand of the UK, France and Germany–and sold more than 100 million tonnes of metals and bulk commodities, including coal. Trafigura’s full FY 2023 revenue of $244 bn surpassed that of British oil major BP Plc. (NYSE:BP).

By Alex Kimani for Oilprice.com

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