UPDATE 2-Trader Arcadia Petroleum replaces CEO, cuts back trading desk

03/28/2013

* Trader replacing CEO Peter Bosworth with Paul Adams -source

* Sources say staff being cut in UAE, Swiss offices

* Some oil trading houses suffer shrinking margins

* Arcadia once a top player in Nigerian oil exports (Adds detail in paras 8 and 18)

By Emma Farge

GENEVA/SINGAPORE, March 28 (Reuters) - Energy trader Arcadia Petroleum plans to replace its long-serving CEO, a well-informed industry source said, and other sources said it would restructure its trading desk in the latest sign that profit margins in the sector are shrinking.

London-based Arcadia, which is one of the world's top oil traders and is owned by a Norwegian shipping magnate, will part company with its British CEO Peter Bosworth who joined as a novice trader more than 20 years ago.

Bosworth will be replaced by Paul Adams, who is currently with Arcadia and was formerly a senior executive in oil trading at BP.

The company did not respond to two requests for comment.

Arcadia owner John Fredriksen, one of the world's richest men known in the shipping sector as "Big Wolf", also owns shipping company Frontline 2012 which he plans to list in New York.

Fredriksen has been expanding his network of tankers during one of the worst slumps in shipping history with global demand imploding due to prolonged economic turmoil.

Industry sources said that Arcadia had cut jobs in its UAE office in recent weeks and one of the sources said the office was closing.

One of the sources added that staff cuts were being made in the Swiss office, without giving details, while two others said that the branch would close.

Arcadia is active in crude and products and in recent years and its total annual turnover has been between $20 billion-$25 billion, according to one estimate.

It has also been strong on paper derivatives markets. Like other privately-owned trading houses it does not disclose profits publicly.

THIN MARGINS

Arcadia has faced U.S. scrutiny and the Commodity Futures Trading Commission has accused Arcadia Petroleum and its affiliates of attempting to manipulate oil prices in 2008.

Arcadia and Parnon Energy, which is also owned by Fredriksen, have denied the charges and submitted a motion to dismiss the case. A U.S. judge in April 2012 denied the motion.

Trading units at some oil companies and traders have struggled in recent years due partly to low volatility.

The world's number one oil trader Vitol returned its second-highest profits on record in 2011 on a steep increase in revenue, but its profit margin and cash flow fell to their lowest in four years, the private firm disclosed this month.

BP has said trading has disappointed in recent years and its weak performance has been the main reason for its failure to fully deliver on its pledge to improve performance in its downstream division.

Arcadia was founded by Japan's Mitsui & Co Ltd in 1998 and has trading desks in the United States, Britain, Switzerland, UAE, Singapore and Australia, according to its website.

It was once one of the top buyers of Nigerian oil, which were known collectively as the "magnificent seven", but it did not appear on the official list of buyers of the OPEC member's crude for 2011-2012.

It has more recently been active trading oil from South Sudan and Yemen. (Reporting by Emma Farge; Additional reporting by Florence Tan, Peg Mackey and Jessica Donati; Editing by Anthony Barker)



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