Several BP trading staff in Singapore have been placed on leave because their names have appeared in court documents filed by banks in their dispute with several commodity traders Bloomberg has reported.

The oil and gas giant is not accused of wrongdoing and the news agency says the oil major has launched an internal investigation.

Banks versus traders

The employees and BP have been name in court filings made by CIMB Bank and Natixis against Hontop Energy and Sugih Energy International, which is now known as Aeturnum Energy.

The banks claim they are facing losses of US$192 million from financing deals with these companies.

L/C differences

The banks say they issued L/Cs after Hontop showed them documents including supposedly binding contracts to on-sell oil to BP. But when the banks went to collect from BP, the oil major said it had never agreed to some of the purchases, according to the claims.

In one such transaction, at least six BP staff were identified in email correspondence with Hontop.

Bank exposure

Several banks are exposed to L/C losses associated with traders, notably in Dubai and Singapore.

Standard Chartered and HSBC are facing losses of millions of dollars in loans to Dubai-based Phoenix Commodities while HSBC has filed a court application alleging "dishonest practices" and "shams" against oil trader Zenrock Commodities Trading.

Dire straits

Other commodity traders that have fallen into dire straits include Agritrade International and Petro-Diamond (DC World News, 3 June 2020).

ABN Amro Bank lodged a claim against Hin Leong Trading, that includes applications for charges related to irrevocable L/Cs tied to the Singaporean oil trading giant's assets (DC World News, 21 April 2020).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.