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Abu Dhabi National Oil Co. is considering a deal to buy all or part of commodity trading house Gunvor Group, according to people with knowledge of the matter, in what would be one of the industry’s biggest deals in years.

The United Arab Emirates’s biggest oil producer has held early-stage talks about a deal that would combine Gunvor with the Middle Eastern company’s own trading arm, according to the people, who asked not to be identified discussing private information. Any deal could still take months to put together and the two companies may ultimately decide not to pursue any transaction, the people said.

Spokespeople for Adnoc and Gunvor both declined to comment.

Gunvor, which is controlled by Chief Executive Officer Torbjorn Tornqvist, is one of a handful of mostly privately-held companies that dominate the trade in physical commodities, making them crucial players in a world struggling with runaway inflation.

It is one of the biggest traders of crude oil and oil products, as well as a major player in the market for liquefied natural gas, which has boomed as Europe looks to wean itself from Russian gas supply. While Gunvor has notched up record profits this year, the volatility in gas markets has been a double-edged sword, triggering massive margin calls and forcing it to cut back its activity.

It’s not clear how much Gunvor would be valued at, if a transaction were to go ahead. The company’s accounts valued its equity at just over $4 billion at the end of June, while it reported record profit of $841 million for the half year.

Tornqvist, who owns over 88% of the company, spoke earlier this year about the potential for Gunvor to raise equity through partnerships, while adding he was “not in the market to sell out.” It’s not the first time Gunvor has courted interest from outside investors: in 2019, the company held talks about selling a stake to Algeria’s state oil and gas producer, Sonatrach. But the talks ended amid political upheaval in Algeria.

Tornqvist also initiated talks with rival houses in 2016 about selling a stake in Gunvor. The approaches were described at the time by people familiar with the matter as informal and preliminary and didn’t lead to any deal.

Middle Eastern state entities have been among the most active investors in commodity trading houses in recent years. Abu Dhabi’s ADQ last year bought 45% of agricultural commodity trader Louis Dreyfus Co., while Qatar’s sovereign wealth fund is one of the top shareholders of Glencore Plc.

Adnoc has been expanding its trading unit in recent years to take advantage of its position as a major producer of oil, natural gas and refined products. Adnoc Chief Executive Officer Sultan Al Jaber led the company in setting up units to buy and sell energy, and listed the emirate’s benchmark crude grade, Murban, on an exchange.

Gunvor was founded in 2000 by Tornqvist and Gennady Timchenko and grew rapidly in the mid-2000s as a major trader of Russian oil. Timchenko exited the business in 2014 as the US imposed sanctions on him as a member of Vladimir Putin’s “inner circle.” Gunvor has expanded globally and, although it holds a minority stake in a Russian oil terminal, says it now has “no material exposure to Russia.”

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