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Leadership for Energy Automated Processing
Leadership for Energy Automated Processing
May 27th, 2008CAPP PresentationCrude Oil Committee – Calgary
www.energyleap.org
May 27th, 2008CAPP PresentationCrude Oil Committee – Calgary
www.energyleap.org
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ObjectiveObjective
The objective of thispresentation is to provide mutual
awareness between LEAP and CAPP.
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What is LEAP?What is LEAP?
• LEAP - Leadership in Energy Automation and Processing• A non-profit organization• Focus on Energy Trading• Global scope• Comprised of industry working groups to
improve energy trading• Executive committee and by-laws
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MembersMembers•Addax BV Curacao•Arcadia•Barclays Bank•BP•Camin Cargo•Cargill International SA •Chevron•Citibank N.A.•Deloitte•Depository Trust & Clearing Corporation•Deutsche Bank •ESS•Glencore Ltd.•Hess Corporation•Intercontinental Exchange•Intertek USA Inc.•Inspectorate•J. Aron & Company
•JP Morgan Chase•Koch Supply & Trading LP•Mercuria Energy Holding BV•Morgan Stanley•Nexen Inc.•PMI Comercio Internacional S.A. de C.V.•Saracen Merchant Energy LP•Sempra Energy Trading•SGS Group Management SA•Shell Trading US•StatoilHydro ASA•Sungard Consulting•Totsa Total Oil Trading SA•Transport4
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Mission StatementMission Statement
Mission Statement: to promote efficient and reliable transaction
processing within the energy trading industry by means of
automation and standardization.
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Energy Trading - InitiativesEnergy Trading - Initiatives
• Promote data automation and standards
• Fill the gaps in automation and standardization which includes contracts
• Develop contract standards to allow for electronic confirmation and electronic settlement of trades
• Work with system vendors on a neutral basis to ensure they use the same data standards
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Standard ContractsStandard Contracts
• Release V2.0 of the LEAP Master Agreement for Crude Oil and Refined Products (U.S.) in Nov., 2007
• International Swap and Derivatives Association (ISDA) is working with LEAP to publish an Oil Annex
• Canadian sub-committee will be releasing the Canadian Addendum to V2.0 of the LEAP Master Agreement in June, 2008
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Benefits of Standard ContractsBenefits of Standard Contracts
• Independent and neutral contract• Industry standard reference point
(95%) standard terms and conditions• Able to customize (5%) if required • Significantly reduces time required to
negotiate contracts• Reduces legal costs associated• Allows electronic confirmation of
energy trades and operational excellence
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Benefits of Electronic Confirmation
Benefits of Electronic Confirmation
• Electronic matching of deals identifies trade capture error rates (10 – 20%*)
• Firm acceptance of deal terms under agreed terms and conditions
• Faster acceptance, facilitates audits• Eliminates manual processes• Reduces paper flow time and costs• 4 companies using eConfirm in the
U.S. for physical crude oil trades*Source: ISDA Benchmark Study 2007
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Error RatesError Rates
*Source: ISDA Benchmark Study 2007
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Canadian Sub-CommitteeCanadian Sub-Committee
Canadian Sub-Committee Members include:
• Nexen, BP, Shell, Chevron, J Aron/GS, Morgan Stanley, Total, Barclays, Mercuria
• The Canadian Addendum appends to the LEAP Master Agreement to include Canadian terms, i.e. Alberta law, credit provisions (CCAA, BIA), tax, currency, exchange rates
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How it worksHow it works
• The Canadian Addendum appends to the LEAP Master Agreement if executed
• One set of Special Provisions allows companies to customize these terms
• The master contract terms then apply to applicable transactions with the parties
• Without eConfirm there are still benefits of shorter contracts that bind the parties under fully agreed terms
• Schedule J of ICE eConfirm allows parties to confirm electronically
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More About LEAPMore About LEAP
Other Global LEAP Initiatives:• Contract Committee - Rotterdam
Barge Agreement (North West Europe)
• Electronic Bills of Lading (Marine)• Certificates Quantity & Quality
(Marine)• Reference Data• Scheduling Initiatives (Transport4)• Settlement Committee
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MembershipMembership
• Membership is not required to use the LEAP Master Agreement, but it is required to participate in committees
Membership Types:• Full Membership (board members)• Regular Membership (committees)• Service Membership (vendors)• Associate Membership (UK - Energy
Institute)
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CONTACT INFORMATIONCONTACT INFORMATION
•Cdn. Addendum:
Karen Mikkelborg403.699.4206Karen_Mikkelborg@nexeninc.com
•LEAP Master Kevin Jandora914.225.4509Kevin.Jandora@morganstanley.com
Mary Dortenzio203.328.3175Mary.Dortenzio@glencore-us.com