FACTBOX-Goldman purchases Nexen’s gas trading book

NEW YORK, May 14 (BestGrowthStock) – Goldman Sachs (GS.N: ) recently
purchased Calgary-based Nexen Inc’s (NXY.TO: ) North American
natural gas trading book, industry sources told Reuters on
Friday, strengthening its already hefty presence in commodities
trading.

Nexen, Canada’s fifth-largest independent oil explorer,
operates in Canada, the Gulf of Mexico, Yemen, the North Sea
and elsewhere.

Goldman Sachs (GS.N: ) is the biggest bank in commodities
with a Value at Risk — the industry standard measure for how
much of a banks’ own money is at risk on any given day — of
around $40 million over the past two years.

Below is a history of financial institutions and their
involvement in commodities trading.

GOLDMAN SACHS

Global head — Isabelle Ealet

Staff — Has more than 200 commodity professionals
throughout the world, in locations such as New York, Calgary,
Houston, London, Sydney, Singapore and Tokyo.

History — Entered the commodities business in 1981 with
the purchase of J. Aron.

Focus — Serving corporate clients and financial investors
ranging from hedge funds to institutional investors and private
equity firms. It is one of the few investment banks in the
world that physically trades and ships crude oil.

Growth plan — Deliver customised risk management for
commodities.

VaR — Risks more of its own money in commodities than any
other Wall Street bank, a figure hovering at around $40 million
over the past two years.

JPMORGAN CHASE (JPM.N: )

Global head — Blythe Masters

History — Acquired Bear Stearns in March 2008 and
increased the bank’s commodities business. Expanded its
presence again in February 2009 when it completed the purchase
of key parts of UBS commodities. A year later, it acquired the
non-U.S. assets of commodities joint venture RBS Sempra from
Royal Bank of Scotland and Sempra Energy for $1.7 billion.

Focus — Trades oil, refined products, power, natural gas,
coal and emissions. Active in agricultural commodities such as
palm oil and cocoa along with base metals.

Growth plan — To be a top-tier franchise globally. Has
moved into second place with a commodities-market VaR of just
over $30 million on average last year.

RBS SEMPRA

Global co-heads — Mike Beck and Michael Goldstein replaced
Kaushik Amin after he resigned in late January.

History — The commodities joint venture between the Royal
Bank of Scotland and Sempra Energy was created in April 2008.
European Commission state aid requirements forced RBS to divest
its share over the next four years. In February 2010, RBS
signed a deal to sell JPMorgan Chase the non-U.S. assets in RBS
Sempra, its commodities joint venture with Sempra Energy.

Focus — Mainly active in physical markets and its main
markets are crude oil, base metals, European power gas and coal
and North American gas and power. It also trades U.S.
agricultural products and emissions.

VaR — Average of 16.7 million pounds ($26.96 million) for
Q3 09

BANK OF AMERICA (BAC.N: )

Global co-heads — David Goodman and Rob Jones, based in
London and Houston.

History — Merrill Lynch acquired the energy trading
businesses of Entergy-Koch, LP.

Focus — includes structuring, trading and marketing
natural gas, power, crude oil, refined products, coal,
emissions, metals, commodity indices, and structured notes.
Involved in both financial and physical markets.

Growth plan — In August 2009, the company announced that
it intends to expand commodities team by 25 percent over two to
three years in anticipation of strong demand for commodities.

CITIGROUP (C.N: )

Global head — Stuart Staley

History — Citibank has traded metals since they were
available to trade, added financial oil and oil related
products in the early 90s and added financial natural gas
products around 1997. Staff work in New York, London and
Singapore.

In 2004/2005, Citigroup committed to an organic build up of
the business and moved several traders from New York to
Houston. In 2006, it began expanding in London. Today, there
are 230 people working for Citi’s global commodities businesses
in Houston, Calgary, New York, London, Singapore and Tokyo.

Focus — Globally trades natural gas, electricity, oil and
oil-related products, metals, agricultural/softs products,
freight, emissions, liquefied natural gas and coal.

Growth Plan — Continue to add staff globally and increase
headcount by 30-40 percent over the next three years; add
further depth of talent and market share in existing products,
and expand capability in physical oil and related products.

Investing

FACTBOX-Goldman purchases Nexen’s gas trading book