Lord Energy: Up-close with Hazim Nada

Up-close with Hazim Nada, Founder and CEO of Lord Energy

HUMBLE BEGINNINGS When he talks about Lord Energy’s beginnings, Hazim Nada is the first to admit that he hadn’t set out for university knowing that he wanted to break into the oil trade.

“I bumped into this business,” he jokes during an interview, “I was originally planning on an academic career; I wanted to be a theoretical physicist.”

Nada’s hopes for an academic trajectory fell short, however, when his financial situation shifted and he realized that he wouldn’t be able to financially support his career or his family on a professor’s salary.

Looking for other options, Nada reoriented his career hopes towards the other major career path his specialty offered: investment banking.

Hazim Nada thus began his investment career as a quantitative analyst — casually referred to by those in the business as a “quant” — for Citigroup. His first forays into the oil industry came when he happened across a quant job for an oil trading company and, later, when he took on an oil-centered trading commodities role with Merrill Lynch.

By 2008, Hazim Nada was ready to set off on his own. Using his old trading contacts and investor networks, he began consulting within the oil trading sector. He soon had enough to purchase capital and start moving shipments of coal, grain, cement, and steel. As Nada describes it, however, these products were only stepping stones for the company’s quest for oil. As he puts it: “I tried to move as many commodities as I was able to move until I reached the market I wanted to focus on.”

BARRIERS TO SUCCESS When he talks about making his way as a relatively small venture in a sector dominated by a few behemoth corporations, Hazim Nada isn’t shy about pointing out the challenges.

“We can’t just compete with these giants [directly],” he states bluntly, “And they are giants, in a very real sense.

Every single one of our competitors turns out $100 billion a year. [Lord Energy] isn’t at that scale yet. ” As a little fish in a pond dominated by whales, Lord Energy shouldn’t be able to hold its own in the oil commodities sector — and yet, it has done just that.

The secret to the company’s success? Creativity.

“They have a lot more ability; they have a lot more capital; they have a lot more reach than we do. So we can’t just sit there and do what they do.” Hazim Nada explains, “We have to innovate […] If we don’t do that, we can’t even survive in this business.”

APPLYING CREATIVE SOLUTIONS Today, Lord Energy has established a presence on nearly every continent and built a reputation around its penchant for innovation. As Hazim Nada explains: “Innovating in our business means creating value for your counterparts, proposing new grades that your industrial end users haven’t looked at, and also opening new markets to your buyers and showing them better prices than what they can get in their [usual] markets.”

Nada referred to the company’s work in Algeria as an example. During the financial crisis of 2008, the region’s crude — a product that had historically enjoyed global use — was more or less abandoned during a period of falling prices and decreased demand. Recently, Lord Energy actively worked to create a market in Asia, and drive demand for the crude overseas. The company’s work forged a mutually beneficial relationship between producers in Algeria, Lord Energy, and buyers across the sea, and further cemented Lord Energy as a creative presence in the sector.

In the years to come, Hazim Nada hopes to apply this drive towards innovation and growth to Lord Energy’s global efforts and eventually establish strong channels that allow for a steady flow of crude across all regions.

WHAT DOES IT TAKE TO BREAK INTO THE OIL COMMODITIES INDUSTRY? Hazi m Nada knows f r om f i r st hand exper i ence how di f f i cul t i t can be t o get even a f oot t hr ough t he door when i t comes t o ent er i ng t he oi l t r ade. As he expl ai ns i t , “ Cr ude oi l …i s a ver y capi t al - i nt ensi ve busi ness [ …]

The shi pment s, as of t oday’ s pr i ces, r ange f r om $60 mi l l i on t o $160 mi l l i on per shi pment . So as you can i magi ne, [ t hi s i ndust r y] i s a cl ub t hat f ew peopl e par t i ci pat e i n. ” Nada hi msel f st i l l vi ews hi msel f as a newcomer t o t he f i el d; Lor d Ener gy t ook i t s f i r st st eps as a company onl y a decade ago. Si nce i t s f oundi ng i n 2008, t he company has st epped f r om pr ovi di ng consul t i ng advi ce t o vent ur es i n t he ener gy sect or t o ent er i ng t he dr y commodi t i es mar ket and t hen, year s l at er , shi f t i ng i nt o t he l i qui d ener gy mar ket s. Hazi m Nada admi t s t hat hi s busi ness i s an out l i er ; f ew, i f any, ot her s have br oken i nt o t he bi g- oi l “ cl ub” over t he cour se of t he past t wo decades.

WHAT MAKES THE WORK THE OIL SECTOR DOES SO COMPLICATED? In the most simplistic terms, Nada explains, Lord Energy purchases crude from regions of oversupply and sells to areas where the product is in demand.

However, the transactions Lord Energy enters into aren’t usually that straightforward. “You’re buying and selling a commodity that is very strategic to several countries,” Nada explains, “With the exporting countries, you’re dealing a lot with national public entities. On the importing side, you’re dealing with private entities, with national entities — but the public sector’s always quite large and quite heavy in this business.”

Success in this sector hinges on not only having the capital but also possessing the connections and business savvy necessary to navigate complex deals within a constantly-shifting global market.

WHY, IF THE COMPANIES IN THE OIL TRADE ARE SO INFLUENTIAL, HAVEN’T I HEARD ABOUT THEM? Few would consider the energy commodities industry to be a small pond — but if it were, it would be home to just a few massive fish. The multinational giant Glencore directs at least a third of the world’s coal supply; Lord Energy, for its part, is an active player in the oil trade on nearly every continent. Why, then, don’t we hear more about them?

Hazim Nada has an answer.

As a general rule, companies in the sector tend not to interact with the public at large when their business is so focused on working with large ventures. The end consumer is not any Average Joe on the street, so commodities traders have little need for street-side advertising or television marketing. As a result, few people outside of the field recognize the names of its most significant players.