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RiskAdvisory Management Consulting Practice

The RiskAdvisory management consulting practice is located in Calgary, Alberta. The firm was established in April 1995 and has been engaged by over 200 clients in the United States, Canada, and New Zealand since its inception. The direct focus of the group is on the provision of risk management advisory services to members of the energy industry. Consulting mandates have centered on the development and application of risk management practices with respect to fuel acquisition, resource optimization, energy marketing, and associated foreign exchange exposures.

RiskAdvisory is a non-transactional entity with respect to market positions. The firm does not act as principal or agent in any market transactions. This ensures an unbiased approach to the provision of risk management services.

Unlike other consulting companies, RiskAdvisory only employs seasoned professionals as consultants. The three Principal Consultants of RiskAdvisory have more than 50 years' related experience in energy trading environments as traders, marketers, systems designers and middle office managers. Two of the principals worked for the Burns Fry Energy Group in the late 1980s at a time when this group was the largest Canadian institutional energy futures brokerage unit. Much of the activity centered on oil futures trading, although natural gas futures trading also represented a component of trading volumes. Three of the principals worked for Bankers Trust during the early 1990s in the Calgary office at a time when this group was the largest provider of oil and natural gas over-the-counter swaps and options products to the Canadian energy sector. Members of RiskAdvisory also have direct physical and financial natural gas trading experience with TransCanada Gas Services. Based on these experiences and its extensive and varied range of mandates since 1995, RiskAdvisory possesses the most concentrated expertise in the application of risk management practices to the oil, gas and power markets of any advisory group in North America.

The consulting bundles briefly detailed below represent the most common form of mandates that we complete. A more detailed description can be found by clicking on the titles of each.

1. Risk Review

  • Perform an initial review of a company's current portfolio of energy assets and energy liabilities along with any purchase and sale agreements for power, gas, oil, and coal in order to gain a solid understanding of the company's underlying portfolio and risk position;
  • Interview key executives/senior management to determine the company's risk management appetite and risk management objectives;
  • Review the energy market and credit risk management policies to ensure the policies meet the company's objectives.

2. Risk Policies and Procedures
Development of Policies and Procedures manuals focusing on:

  • Policy Objectives;
  • Employee Roles and Responsibilities;
  • Implementation Process and Organizational Design;
  • Market Risk Quantification and Limits;
  • Credit Risk Quantification and Limits;
  • Systems, Accounting, and Documentation;
  • Authorized Products;
  • Management Reporting.

3. Portfolio Valuation & Exposure Quantification
Perform a quantitative analysis that would generate a distribution around the company's anticipated earnings over a calendar year. The analysis would be based on objectively determined forward market pricing and volatility data.

Variables would include:

  • Oil
  • Natural gas
  • Power
  • Product pricing (if applicable)
  • Currency
  • Any intra-commodity and intra-temporal correlations.

The distribution would be around the uncertainty associated with energy revenues and/or energy costs. The analysis would show the distribution both in an unhedged scenario and with any existing hedge positions that a company may have put in place.

4. Risk Management Workshops
RiskAdvisory will prepare and deliver customized workshops on risk management issues pertaining to the management of energy market and credit exposures. Topics may include, but not be limited to the following:

  1. Risk Management Program Overview
  2. Risk Management Program Objectives:
  3. Risk Management Approaches
  4. Risk Management Tools
  5. Risk Quantification
  6. Organizational Structure

The format will allow for an open discussion period during the workshop. RiskAdvisory will review the proposed workshop agenda with the company prior to the workshop to ensure that the topics covered are applicable to each individual company and customize the workshop to each company's specific areas of interest. The workshop is open to an unlimited number of employees and can also be structured for a company's Board of Directors.

For more information on our consulting practice, please contact:
Jim Joyce
Principal Consultant
RiskAdvisory, a Division of SAS
Tel: (403) 263-7475
Mobile: (403) 862-5729

RiskAdvisory Consulting Clients
RiskAdvisory has provided consulting services to hundreds of companies across a number of industries.