Despite the break-up of its CalBear energy trading joint venture with bankrupt Calpine Corp., Bear Stearns still plans to be a player in the natural gas and power markets through a new trading operation it is setting up in Houston called Bear Energy LP. The company is currently hiring gas and power traders and support personnel.
“We’ll grow the staff in proportion to the level of business,” Bear Stearns spokesman Russell Sherman told NGI. The operation will be headed up by Francis Dunleavy and Eli Wachtel, both Bear Stearns senior managing directors, he said.
Bear Stearns initially entered the energy markets through the CalBear partnership (see Daily GPI, Sept. 9, 2005). However, that partnership came to an end earlier this month because of complications surrounding Calpine’s ongoing bankruptcy, the companies said (see Daily GPI, April 4). Bear Energy will retain the existing contracts of CalBear and build upon that business. Bear Energy will not own power plants and will be strictly a financial player, Sherman said. He would not give any projections for the notional volumes of gas and power Bear Energy expects to be trading.
Paul Posoli was the Calpine executive vice president named to head the CalBear venture. He left the company abruptly last month. When CalBear was formed he told NGI that the new company would greatly expand Calpine’s market position, about 3% of the gas and power markets. Posoli’s abrupt departure from the CalBear venture was seen by many as the nail in its coffin. Traders were said to be disgruntled over cuts to their 2005 bonuses and many had been jumping ship in the last couple of weeks, some of them to the Bear Energy startup.
Bear Stearns certainly is not the only financial/banking player in the gas and power markets. Merrill Lynch, Morgan Stanley, Societe Generale, UBS, Bank of America, Goldman Sachs and Citigroup are others active in energy.
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