Operational risk
In pole position
Sakonnet’s Thurstan Bannister says a sound footing in risk management and a customer-facing approach is the secret of his company’s success. By Stella Farrington
Francois-Xavier Saint Macary
It can’t be easy hauling a whole commodities division overseas, but SG CIB veteran Francois-Xavier Saint Macary has big ambitions. By Oliver Holtaway
Keep it simple, stupid
Do you prefer sophistication or simplicity? Neil Palmer takes a look at optimisation methods in energy modelling and asks if energy quants aren’t sometimes being a little too heavy-handed
Belgian power exchange to launch early 2006
The Belgian day-ahead electricity market is due to start in early 2006 on the Belgian power exchange (Belpex) in a link-up with Dutch power exchange APX and French energy exchange Powernext. This is the first time three power exchanges will be linked…
Some brokers taking wrong approach to freight, says senior broker
Inter-dealer brokers could be taking the wrong approach by entering the freight derivatives market through joint ventures with physical shipping brokers rather than directly broking physical freight, says a senior energy broker.
Storage strategies
Companies are increasingly realising they can use natural gas storage to add value to their bottom line. TransCanada’s Farzan Nathoo weighs up the strategies available for optimising value through storage
The technology trap
Large banks are increasingly looking to energy trading to improve liquidity and develop relationships with large institutional and industrial clients. James Kemp looks at some of the technological challenges they face
Checking outside the box
Companies often use checklists to evaluate their IT buying requirements. But these rarely address what the firm actually needs. Brett Humphreys discusses how over-reliance on checklists may lead to poor software buying decisions
Making a connection
Addressing both sophisticated multi-asset trading and physical asset optimisation – while complying with stringent new regulation – are challenges few software firms claim to have the entire solution to. Oliver Holtaway reports
Risk-adjusted planning
An energy firm’s economic performance can be highly affected by incorrect valuation of implied economic risk. For this reason it is essential to provide management with the correct risk assessment tools. Here we propose a way of introducing risk…
Editor
"With oil prices at record highs, energy is set to remain key in strategic decision making"
The best of all worlds
Thanks to their varying scale, structure and diversity, European organisations often have very different solutions to risk management. But which system is the most effective? In an exclusive to Energy Risk, the European Energy Risk Forum offers a route…
Training the tiger
Derivatives are finally beginning to gain wider acceptance in Taiwan, but senior executives remain wary, associating them with the collapse of Barings and, more recently, China Aviation Oil’s huge trading losses, finds David Hayes
Clearing service launches for physical power in US
North American Energy Credit and Clearing (NECC), the Clearing Corporation (CCorp) and Atlanta-based commodity-trading platform IntercontinentalExchange (Ice) have launched a physical clearing service for the US energy markets.
The clearing challenge
Growing over-the-counter trade in the energy markets, much of it from hedge funds, coupled with exceptional price volatility, could test the current clearing system to the limit, warns independent consultant Chris Cook
The dragon’s revenge
In the second article on the pitfalls of hedging, Neil Palmer considers one of the risks of managing options: dynamic hedging. He shows there is an awful lot that can go wrong in the quest for perfect risk elimination
Valuing interruptus
Managing wholesale spot power price volatility by turning off supply offers a way of reducing price spikes, but measuring the value of such interruptibility involves costly modelling techniques. JK Winsen suggests a simpler alternative
The ABC of PCA
Often, the costs associated with implementing advanced statistical models can outweigh the potential benefits. Brett Humphreys shows how to smooth and speed up choppy simulations using principal components analysis
UK business paying £1bn/year too much for energy
UK businesses are failing to manage energy buying efficiently and as a result are exposed to volatile prices, losing up to £1 billion ($1.81 billion) a year, a new survey has found.
GlobalView technology to support ConfirmHub
US-based GlobalView Software has been chosen as the exclusive technology provider to ConfirmHub, a joint venture by brokers Icap, Amerex Energy and Prebon Energy. ConfirmHub is a post-execution, straight-through processing (STP) trade-confirmation…
Awards
Welcome to the annual Energy Risk awards, celebratingthe talent,innovation and enthusiasm that forms thebackbone of this industry.
Standard challenges
Early signs suggest European energy companies may, like their US counterparts,have problems complying with a new derivatives-accounting standard. But theydo have newguidelines to help interpret the rules. By Joe Marsh
Contract killers
Hidden risks can lurk in unexpected areas – such as the contracting process. Brett Humphreys and Brett Friedman discuss how risk managers must look beyondsimple value-at-risk measures and find other potentially hidden exposures
Buyer beware
Risk-management software development is still struggling to recover from slashed budgets after the Enron debacle. So before choosing a new system, buyers should look closely at five critical areas, writes Salim Jabbour