Exxon Mobil Corp. tapped human-resources chief Tracey Gunnlaugsson to lead its new global trading division as part of the oil giant’s plan to compete with more established players in the world of energy trading.
(Bloomberg) — Exxon Mobil Corp. tapped human-resources chief Tracey Gunnlaugsson to lead its new global trading division as part of the oil giant’s plan to compete with more established players in the world of energy trading.
The division will bring Exxon’s crude, natural gas, power and petroleum-product desks under one roof by June, in a bid to deliver “industry-leading trading results,” the company said in a memo earlier this year. Gunnlaugsson joined Exxon in 1991 and became vice president of human resources in 2018 after previously holding roles in refining and supply as well as shipping.
She will report to Senior Vice President Neil Chapman. Exxon will announce the organizational structure beneath Gunnlaugsson in due course, Chapman said.
The creation of the new division, part of Chief Executive Officer Darren Woods’ three-year internal reorganization, raised speculation that Exxon may be looking to become a major competitor to commodity merchants like Glencore Plc, Trafigura Group and Vitol Group. In contrast to European rivals BP Plc and Shell Plc that have established trading units, Exxon historically has shunned speculative trading, preferring to focus on the production of petroleum products.
In recent years, Exxon has expanded in all aspects of trading, including taking on positions around its assets as well as origination, and the company is aiming to leverage its understanding of global markets to further grow the business, Chapman said.
“Obviously, we have not been trading as deep as some of our competitors — for as long a time as companies like BP — but I feel very good about where we’ve taken trading over the last few years and we really believe it’s an opportunity for us,” Chapman said in an interview.
Attracting Talent
Traders often have to navigate and take on risks during periods of high volatility in order to reap big profits. For Exxon, succeeding in the high-risk high-reward business of trading would require changes to its typically risk-averse culture, market participants have said.
The company will also have to compete on pay with the major trading houses.
“We’ll always look to make sure we can both attract and retain talent,” Chapman said. “We’ll adjust the compensation schemes wherever we see fit to make sure we can do both.”
Exxon has generally relied on seasoned veterans to assume leadership roles, rather than hiring external candidates. Gunnlaugsson’s appointment signaled to some traders that Exxon may continue to take a conservative approach to trading, at least for now.
Merchants including Vitol and Mercuria have seen record profits in 2022, and while Chapman didn’t provide specifics on trading results, he said Exxon’s trading results were “good,” much like the rest of the industry.
The oil titan has several advantages over more-established traders, despite being a relative newcomer. Exxon has an unparalleled global footprint of refineries, pipelines, ships and storage terminals, giving it unique insights into supply flows and demand trends. It’s also flush with cash after reaping a record annual profit of $59 billion in 2022.
“We have a very large global asset portfolio and a deep understanding of global energy markets,” Chapman said. “We’ve always believed that it’s a good foundation to build our trading business.”
(Adds comments from Exxon Senior Vice President Neil Chapman starting in third paragraph)
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