Of all stages in the oil, gas and liquids value chain, downstream operations are where margins are tightest, and mitigating against margin erosion most critical. Managing commercials across the supply chain, ensuring seamless logistic operations, and segmenting customers for effective targeting of refined products all contribute towards margin enhancement.
In addition to operational efficiency, downstream players have to manage energy market risk and mitigate exposure to price volatility, fluctuating demand and economic uncertainties. The Value at Risk calculation needs to remain visible, but must be constantly adjusted in line with market conditions. Effective price hedging plays an increasing role, but can fall under the remit of new energy trading regulations.
Baringa works with downstream clients to provide greater visibility over their operations, and identify areas where margin is being lost. These metrics form the foundation for cost reduction and performance enhancement programmes.
Through our strong midstream capabilities, we design and deliver optimised sourcing strategies both for raw materials and refined products, and transform processes around energy transport, gas storage, freight and logistics for improved supply chain management downstream. We also work with clients to develop compliant hedging and price risk management strategies, to keep margin leakage to a minimum.