November 9, 2017 / 7:42 PM / a year ago

UPDATE 2-Socar Trading to quit Calgary, move some functions to U.S. -letter

(Updates with Socar exec exit, Canada layoffs, paragraphs 8-10)

By Catherine Ngai

NEW YORK, Nov 9 (Reuters) - Azeri state oil company Socar’s North American trading division will close its Calgary office in Canada and move all commercial and support functions to Houston in the next three to four months, according to a letter on Thursday reviewed by Reuters.

The company, which entered the Canadian market in 2015 and opened a Houston office in late 2016, said Houston had continued to grow and had increasingly become a hub for its activities in North America, according to the letter.

It was not clear if any staff would relocate to Houston. The company had around 15 people in Calgary when it opened and traded local Canadian crude grades, natural gas and financial derivatives, its chief executive told Reuters last year.

The company also held some space at the U.S. storage hub of Cushing, Oklahoma.

A company representative could not immediately be reached for comment.

Socar Trading also said in the letter that while the plans do not affect any current business, it would likely reduce the scope of some of its activities over the coming months. It added that it would continue to operate “business as usual” to meet any physical and financial commitments.

Geneva-based Socar Trading was set up in 2007 as the marketing arm of Azerbaijan’s national oil company, and has since moved to trading third-party crude and products.

Earlier this year, Gary Pon, the former head of Socar’s North American crude and natural gas trading group, left the company.

A three-year oil price slump has taken a toll on the industry worldwide. Prices have been rising in recent months, yet a number of Canadian oil and gas companies have had major downsizing and have cut capital expenditures.

Last week, Calgary-based Gibson Energy, which provides storage and transportation services for energy companies, laid off staff across its Canadian operations, as it looks to focus on cutting costs. (Reporting by Catherine Ngai; Editing by Susan Thomas and David Gregorio)

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