Ensuring E/CTRM Implementation Success

An energy/commodity trading and risk management (E/CTRM) system implementation project is the structured process of taking a newly acquired E/CTRM software product from delivery of code to full “in production” use, and in the process, meeting the business needs that precipitated its purchase.

Implementing an E/CTRM system shares many of the complexities involved in implementing any other enterprise-scale IT system. It requires a comprehensive plan, solid leadership (both executive and project management), specialized technical and business expertise, and a commitment from the software vendor to provide the necessary support to make their new client successful.

However, E/CTRM solution implementations are further complicated by the fact that the E/CTRM product operates not only as the system of record (that is, the system that records, maintains, and accounts for transactions), but it also provides capabilities for managing contracts, trades/deals, logistics, position management, risk management, and associated analytics. A comprehensive E/CTRM system is designed to be a singular system that provides energy and commodity trading organizations the depth and breadth of the highly specialized functionality their businesses require. As such, E/CTRM systems are extremely complex and require detailed knowledge of the business combined with a deep understanding of the software capabilities to properly implement. ComTech Advisory’s experience and research suggest that the effort required and the risks involved in implementing and integrating a sophisticated, configurable enterprise-scale E/CTRM solution are of ten poorly understood by the client and may be minimized (though not necessarily intentionally) by the software vendors during the sales process. Underestimating the real costs and project risks can quickly turn what would otherwise be a “bargain” software package into a long-term, costly headache. All things being equal, when it comes to E/CTRM software, the lowest priced solution may not necessarily be the right solution.

Read the document online or download it from the CTRM Center Ensuring E/CTRM Implementation Success

Addressing the Decline – Finding the Silver Lining for Producers

From around 2005 to early 2014, the revolution in North American oil and gas production, spurred by the development of long reach horizontal drilling and massive hydraulic fracturing technologies, attracted billions of dollars in new capital to the space – fueling huge growth in drilling activity, oil and gas production, and in the numbers and size of oil and gas producers operating in the space. However, with the sudden collapse of oil prices (beginning in the third quarter of 2014, which saw the value of crude decline by more than 50% from its high in July of that year), the inflow of capital has shrunk, and with it, the expansive growth in the producer market. While the collapse in the oil markets has had far reaching impacts across the global economy, nowhere are the consequences more greatly felt than in the North American oil and gas fields.

With this low price environment extending for almost a year now, US and Canadian producers have slashed drilling and exploration budgets and are cutting costs to preserve cash in order to ensure their survival. Companies that had principally relied on debt financing to support their drilling activities have been particularly impacted and many are struggling to meet debt payments, forcing liquidation of assets as bankruptcies loom. The upstream market is seeing the beginning of a wave of mergers and acquisitions as the stronger producers, those that funded their activities through generated cash or retained earnings, are now looking for bargains amongst the weaker.

Read the document online or download it from the CTRM Center Addressing the Decline – Finding the Silver Lining for Producers