Presentation on theme: "Leadership for Energy Automated Processing"— Presentation transcript:
1 Leadership for Energy Automated Processing May 27th, 2008CAPP PresentationCrude Oil Committee – Calgary
2 presentation is to provide mutual ObjectiveThe objective of thispresentation is to provide mutualawareness betweenLEAP and CAPP.
3 What is LEAP? LEAP - Leadership in Energy Automation and Processing A non-profit organizationFocus on Energy TradingGlobal scopeComprised of industry working groups to improve energy tradingExecutive committee and by-laws
4 Members Addax BV Curacao Arcadia Barclays Bank BP Camin Cargo Cargill International SAChevronCitibank N.A.DeloitteDepository Trust & Clearing CorporationDeutsche BankESSGlencore Ltd.Hess CorporationIntercontinental ExchangeIntertek USA Inc.InspectorateJ. Aron & CompanyJP Morgan ChaseKoch Supply & Trading LPMercuria Energy Holding BVMorgan StanleyNexen Inc.PMI Comercio Internacional S.A. de C.V.Saracen Merchant Energy LPSempra Energy TradingSGS Group Management SAShell Trading USStatoilHydro ASASungard ConsultingTotsa Total Oil Trading SATransport4
5 Mission StatementMission Statement: to promote efficient and reliable transaction processing within the energy trading industry by means of automation and standardization.
6 Energy Trading - Initiatives Promote data automation and standardsFill the gaps in automation and standardization which includes contractsDevelop contract standards to allow for electronic confirmation and electronic settlement of tradesWork with system vendors on a neutral basis to ensure they use the same data standards
7 Standard ContractsRelease V2.0 of the LEAP Master Agreement for Crude Oil and Refined Products (U.S.) in Nov., 2007International Swap and Derivatives Association (ISDA) is working with LEAP to publish an Oil AnnexCanadian sub-committee will be releasing the Canadian Addendum to V2.0 of the LEAP Master Agreement in June, 2008
8 Benefits of Standard Contracts Independent and neutral contractIndustry standard reference point (95%) standard terms and conditionsAble to customize (5%) if requiredSignificantly reduces time required to negotiate contractsReduces legal costs associatedAllows electronic confirmation of energy trades and operational excellence
9 Benefits of Electronic Confirmation Electronic matching of deals identifies trade capture error rates (10 – 20%*)Firm acceptance of deal terms under agreed terms and conditionsFaster acceptance, facilitates auditsEliminates manual processesReduces paper flow time and costs4 companies using eConfirm in the U.S. for physical crude oil trades*Source: ISDA Benchmark Study 2007
11 Canadian Sub-Committee Canadian Sub-Committee Members include:Nexen, BP, Shell, Chevron, J Aron/GS, Morgan Stanley, Total, Barclays, MercuriaThe Canadian Addendum appends to the LEAP Master Agreement to include Canadian terms, i.e. Alberta law, credit provisions (CCAA, BIA), tax, currency, exchange rates
12 How it worksThe Canadian Addendum appends to the LEAP Master Agreement if executedOne set of Special Provisions allows companies to customize these termsThe master contract terms then apply to applicable transactions with the partiesWithout eConfirm there are still benefits of shorter contracts that bind the parties under fully agreed termsSchedule J of ICE eConfirm allows parties to confirm electronically
13 More About LEAP Other Global LEAP Initiatives: Contract Committee - Rotterdam Barge Agreement (North West Europe)Electronic Bills of Lading (Marine)Certificates Quantity & Quality (Marine)Reference DataScheduling Initiatives (Transport4)Settlement Committee
14 MembershipMembership is not required to use the LEAP Master Agreement, but it is required to participate in committeesMembership Types:Full Membership (board members)Regular Membership (committees)Service Membership (vendors)Associate Membership (UK - Energy Institute)