Citi to sell oil trading unit

US banking giant Citigroup has agreed to sell its oil trading unit
Phibro LLC to Occidental Petroleum for some 250 million dollars, the
companies said Friday. Citi, which has received massive US
government aid to help it overcome losses in the financial crisis,
said the sale would be at 'net asset value' and that the proceeds
would be 'not material' to earnings. The deal would close in the
fourth quarter pending approvals. 'The decision to sell Phibro was
the outcome of an evaluation of a variety of alternatives and is
consistent with Citi's core strategy of a client- centered business
model,' the bank said. 'The sale of Phibro does not affect Citi's
client- facing commodities business lines, which will continue to
operate and serve the needs of Citi's clients throughout the world.'
Occidental said its net investment would be around 250 million
dollars for Phibro, which is a trader in oil and gas. 'Phibro does
not trade in any exotic derivatives or hold any level three type
assets,' Occidental said. Phibro's management team and its
employees will remain with the company after closing, according to
Occidental It added that 'significant portions of current and
future bonuses will be deferred and retained by Phibro and paid out in
future years.' According to the Wall Street Journal, Citi has been
under pressure to unload the unit because of a 100 million-dollar
annual pay package for Phibro head Andrew Hall.