Major Japanese trading house Mitsui & Co is in talks to sell its London-based oil trading arm Arcadia to Norwegian shipping tycoon John Fredriksen, industry sources in Tokyo and London said.

Mitsui is looking to sell all or part of Arcadia, which employs about a dozen oil traders and is focused mainly on European and African crude markets, in order to consolidate its supply chain and better manage risk, said the sources.
“Arcadia is for sale,” said a Tokyo-based industry source familiar with the talks. “Mitsui is looking for a partner.”
Another industry source said Mitsui could be looking to sell the unit for about $50 million, equivalent to Arcadia's latest annual profits, although valuations would depend heavily on how much of the trading talent remained intact.
A spokesman at Mitsui, Japan's second biggest trading house, declined to comment. Arcadia also had no comment.
Fredriksen is best known as the principal owner of Frontline, the world’s biggest independent oil tanker shipping company, but would likely buy Arcadia via an unlisted vehicle to avoid any public scrutiny of the secretive trading house.
Oscar Spieler, managing director and CEO of Frontline, said the company was not purchasing any energy traders.
The purchase would allow Fredriksen to cash in windfall shipping profits for a foothold in the lucrative oil trading business, becoming the latest in a string of companies, banks and investors who are looking for ways to capitalise on soaring oil prices that are nearing $60 a barrel.
It could also relieve Mitsui of a unit whose aggressive style of trading was increasingly out of step with its parent, which has been under increased scrutiny at home as regulators across the world zero in on energy markets.
In 2000, Arcadia – best known as an active trader of Nigerian crude – was named in a lawsuit by US independent refiner Tosco Corp over alleged Brent market manipulation. They reached an out-of-court settlement. The Enron and US power trading scandals of the past few years have thrown the spotlight on unregulated energy derivative and physical markets.