Occidental-Phibro, a Conservative Match Made in Heaven?
Occidental Petroleum’s announcement to buy Phibro, the energy trading unit under Citigroup, left lots of analysts and industry-folk scratching their heads — surprised the oil and gas company would part from its typically conservative path. Occidental said Friday it would pay $250 million– or net asset value — for Phibro, a successful and, more recently, controversial firm that primarily trades in oil and gas. Citigroup, which has received about $45 billion in government bailout money, was widely criticized over a $100 million compensation package that was expected to be paid this year to Andrew Hall, the trading phenom who heads Phibro. Occidental has largely shunned the practice of taking bets on commodities prices, an approach that has set it apart from majors like BP, which operate large speculative…
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