UBS Warburg Energy, which launched a domestic energy trading arm when it took over Enron Corp.’s decimated energy trading platform earlier this year, has decided to shutter its Houston offices and consolidate operations in Stamford, CT.

In a statement, UBS Warburg, a business unit of Swiss-based UBS AG, said the move “will further integrate the energy trading business with UBS Warburg’s trading operations and is in response to the extensive restructuring and market contraction that has occurred in the U.S. energy marketplace since the company began operations in February 2002.”

Since it entered the energy trading marketplace in North America, UBS rarely disclosed any information on how well the new trading platform was performing, but there were rumors that it was doing as poorly as the other energy merchants throughout the country, most headquartered in Houston.

During a third-quarter earnings call from Zurich, Switzerland earlier this month, UBS Group President Peter Wuffli told analysts that as far as energy trading goes, “we have seen a total collapse in the business” (see NGI, Nov. 18). UBS Warburg, the UBS securities arm, acquired Enron’s merchant trading unit through a bankruptcy auction last January after agreeing to cover the payroll and pay Enron about one third of pre-tax profit — with no money down — in a deal that many at the time considered a coup (see NGI, Jan. 14).

However, UBS laid off about 130 of the 630-plus Houston-based employees in August, and more lay-offs were rumored, although there were no specifics on whether any of the present Houston employees will lose their jobs. Although most of its competition has pulled out of energy trading, Wuffli said UBS has no plans to exit the business.

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