Identify, grasp, assess
& manage the risks
Concord Energy has strategically positioned itself to play an important role in the global oil and gas trading supply chain by being involved in all key stages of a trade cycle: sourcing, transport, storage, blending, distribution. The future development and stability of Concord Energy is strongly linked to our ability to manage the risks which are ever present in this environment.
Concord Energy maintains sophisticated risk management systems, processes and controls. Central to this is the Concord Energy Risk Policy. The Concord Energy Risk Policy clearly defines the policy regarding credit & financial, jurisdictional, operational and market related risks. It is a living Policy which is reviewed annually to reflect changes and emerging trends in the business environment. All Risk exposures are continuously analysed and assessed against the Concord Energy Risk Policy.
We review every transaction on its merits and our approach to exposure to risk is to subject each risk to a thorough process in three steps:
1) identify and eliminate unnecessary risks,
2) compute and quantify the residual risks in terms of cost and
3) rigorously tackle the residual risks with calibrated risk management tools.
The Concord Energy Risk Policy covers the following key risk elements:
• Counterparty, credit, fraud risks are inexistent with a strict due diligence before on-boarding new businesses and consistent due diligence update of existing businesses and of the partners.
• Regulatory risks are avoidable with a rigorous compliance policy.
• Pricing and forex risk are hedged with adequate financial derivative tools and banking solutions.
• Transport & logistics risks are mitigated with insurance policies.
• Geopolitical and war risks are reduced with an in-depth understanding of the regional geopolitics and ultimately with war risk insurance.
• Risks of financial and banking crunch are reduced with a disciplined treasury management and swift ability to access fresh cash liquidity.
• Complacency risk is the mother of all risks and can only be eradicated with a strong leadership.
We live in a world of risks. There is no way out of it. Tackling each risk with the most suitable and most calibrated solution defines Concord Energy’s approach to risk management.