KPMG UK - Commodity and energy trading risk management

Contacts

Lee EdwardsPartnerT: +44 (0)207 311 4796 M: +44 (0)7801 055 087 E: [email protected]

Sunilkumar RamakrishnanPrincipal AdvisorT: +44 (0) 207 694 5870 M: +44 (0)7824 598 229 E: [email protected]

Patrick Ohene-DjanExecutive AdvisorT: +44 (0) 207 694 5438 M: +44 (0)7920 807 571 E: [email protected]

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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fINANCIAL MANAGEMENT

Commodity & Energy Risk Management

Advisory

kpmg.co.uk

Our team comprises commodity and energy risk management professionals with broad industry knowledge, combined with experience in core areas including accounting, treasury and tax. Not only do we have in-depth knowledge of the challenges you face, we also have the experience and well-developed methodologies backed up by an established record of meeting these challenges.

Our team has helped many multinational organisations in the development of risk strategies over many years including:

• OilMajors

• Commoditytradinghouses

• Refiningorganisations

• Utilities

• Commodity/energyintensivecorporates

• Brokerages

• Investmentbanks

Our Team & Experience

Commodity Energy (CERM) brochure v3 6pp.indd 1-3 28/04/2011 16:20

As global commodity and energy markets continue to experience sustained volatility post-credit crisis, leading companies are seeking methods to identify and respond to market, credit and operational risks.

Whether your most pressing issues involve risk management, regulation, accounting, internal audit or Energy Trading & Risk Management (ETRM) Systems, KPMG’s experienced team is on hand to help.


ETRM

Sys

tems &

Risk Reporting Hedging & Risk Management

Regulation & Compli

ance

Accounting, Tax & Internal Audit


Credit & Market

Risk Hedging &Procurement

Strategy

Enterprise RiskManagement

Regulation &Compliance

Operations

Tax &Accounting

InternalAudit

Forensics &Investigations

ETRM System Evaluation

Risk Modelling & Model Validation

Risk Reporting

Risk Governance & Policies

ETRM systems are evolving rapidly to keep up with an increasingly complex trading environment. Have your systems kept pace with this change?

Leading organisations are starting to see Risk Management as a competitive edge. Has your organisation exploited this potential advantage?

Current levels of market volatility may have a significant impact on your financial results. Have you investigated the accounting alternatives for mitigating this volatility?

As a result of the credit crunch there is considerable focus on governance and compliance. How has your organisation responded to the rapid changes in the global regulatory environment?

Hedging & Risk ManagementGiven today’s volatile markets your competitive edge can depend on a robust hedging strategy and the ability to effectively manage risk

Regulation & ComplianceFollowing the credit crunch there has been an unprecedented focus on regulation resulting in a heightened awareness of governance and compliance in the commodity and energy trading environment

Accounting, Tax & Internal AuditGiven the increased complexity of traded instruments along with increased disclosure requirements – accounting, valuation and internal audit programmes are of mounting importance

ETRM Systems & Risk ReportingFrom deal capture through to risk measurement and reporting, the right ETRM system is a critical feature in your approach to risk management

KPMG has a team which offers a combination of thought leadership and industry leading practice around market & credit risk and hedging & procurement strategy. We effectively consolidate our knowledge in offering a

tailored approach to Enterprise Risk Management (ERM), a fast growing evolution in the holistic management of risk.

Credit & Market Risk• Riskidentification,measurement&mitigation

• Counterpartycreditriskmanagement

• Risk-basedperformancemeasurement

Hedging & Procurement Strategy• Hedgeprogrammedevelopment

• Commodity/energyprocurementstrategy

• Riskappetitedefinition

Enterprise Risk Management• ERMpolicyframeworkdevelopment

• ERMmodeldevelopment

• Integrateddashboarddevelopment

The regulatory environment is changing rapidly. KPMG is ready to assist your organisation navigate through the regulatory challenges ahead.

Regulation & Compliance• Regulatorycapitalmodelling

• Regulatorycomplianceandstrategyreview

• Tradercompliancereviews

Operations• Supplychainmanagementoptimisation

• Operationsriskandcontrolreviews

• Operationalefficiencybenchmarking

Risk Governance & Policies• Industrybenchmarking

• Riskframeworkdevelopment

• Riskgovernance&policyalignment

In an increasingly complex commodity and energy trading environment, KPMG has the experienced professionals to support your accounting, tax and internal audit support requirements. As specialists in commodity and energy

derivatives, hedge accounting and valuations we combine our traditional strengths to help you achieve value.

Tax & Accounting• Hedgeaccounting,valuationandtechnologysupport

• Taxplanning,analysisandresearch

• Rulingandopinionsupport

Internal Audit• Internalauditworkprogrammedevelopment

• Internalauditstrategicsourcing

• Specialistinternalauditsupport

Forensic & Investigations • Fraudriskmanagement

• Roguetraderrisk–programdevelopment

• Contractreviews

Advanced ETRM systems are playing an increasingly critical role in assisting organisations to capture, evaluate, quantify, monitor and report risks. KPMG has experienced professionals to assist you in the evaluation and selection

of the ETRM system appropriate to your organisation, including the implementation of the appropriate risk reporting framework so as to ensure you get a solution that is right for you.

ETRM System Evaluation• Targetoperatingmodel

• Systemsselection(RFI/RFP)

• Systemsimplementationandintegration

Risk Modelling & Model Validation• Modeldevelopmentandvalidation

• Modelriskandcontrol

• Priceandcurvevalidationmethodology

Risk Reporting • Reportingframeworkdesign

• Systemanddatarequirementsdefinition

• Reportdesignandspecification

Credit & Market


Strategy



Operations

Tax &Accounting

InternalAudit




Risk Reporting




Credit & Market


Strategy



OperationsTax &Accounting

InternalAudit




Risk Reporting

Risk Governance

& Policies


Credit & Market


Strategy



Operations

Tax &Accounting

InternalAudit




Risk Reporting



Credit & Market


Strategy



Operations

Tax &Accounting

InternalAudit




Risk Reporting


Diagram source: KPMG International

Commodity Energy (CERM) brochure v3 6pp.indd 4-6 28/04/2011 16:20

Business

KPMG UK - Commodity and energy trading risk management