Sources say that former Shell oil traders have set up a trading house focusing on Africa.

Two sources familiar with this development say that several former Shell traders have established the trading house Atmin, which is backed by Afreximbank and focuses on African oil trade.

This move comes as Western banks and oil majors retreat from Africa. The continent faces a decline in production of oil and gas due to underinvestment and also spends $30 billion per year on fuel imports.

As global producers race to extract as much oil and gas as possible before demand for fossil fuels is reduced by the energy transition, millions of barrels in Africa could be left stranded.

Ajay Omen will run Atmin (Africa Trading Minerals), according to the sources. Oommen spent 17 years working at Shell, where he was the head of low-sulphur crude trading, which dealt with up to 1.5million barrels of oil per day, including oil from Africa.

Atmin has also hired Vikram Thakur who spent 18 years working at Shell in various capacities, including business development, trading origination, and structured finance. Joseph Kanaan was a Shell trader for 11 years.

Atmin, a company based in Dubai, will employ around 15 people. Sources said that it will begin with crude oil and then expand to oil products and mineral.

Sources said that Afreximbank would be the controlling shareholder in Atmin while employees would own 15%.

Afreximbank has not responded to any requests for comment.

In a statement on Monday, Afreximbank said: "Afreximbank-affiliated trading entity Atmin will ... participate actively in the trading and financing activities of the leading African oil trading companies with long-term relationship with Afreximbank."

Afreximbank, which was founded in 1993 by African governments and private investors to promote African trade, is owned by these governments as well as institutional and private investors.

The bank announced on Monday that it had launched a $3 Billion revolving Trade Financing Programme to help finance purchases of fuels for African and Caribbean customers, including refineries in Africa. Patrick Werr contributed additional reporting. Mark Potter edited the article.

(source: Reuters)