Leadership for Energy Automated Processing

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Leadership for Energy Automated
Processing



May 27
th
, 2008

CAPP Presentation

Crude Oil Committee


Calgary


www.energyleap.org



2

Objective

The objective of this

presentation is to provide mutual

awareness between

LEAP and CAPP.





3

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






4

Members


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

5

Mission Statement


Mission 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 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






7

Standard 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







8

Benefits 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







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 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






10

Error Rates










*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, 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





12

How 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






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 Data


Scheduling Initiatives (Transport4)


Settlement Committee







14

Membership


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)







15

CONTACT INFORMATION


Cdn. Addendum:

Karen Mikkelborg

403.699.4206

Karen_Mikkelborg@nexeninc.com


LEAP Master

Kevin Jandora

914.225.4509

Kevin.Jandora@morganstanley.com


Mary Dortenzio

203.328.3175

Mary.Dortenzio@glencore
-
us.com