LITASCO GROUP Support Functions
Price Risk Management
LITASCO SA is exposed to market price risk, as such risk-taking is inherent to the nature of oil trading business.
LITASCO SA's Risk Management aims to systematically maintain price risk at acceptable levels by closely monitoring trading activity.
Risk mitigation is pursued through carefully structuring physical deals and actively transferring risk to third parties. Price risk transfer is achieved, among other tools, by using exchange traded and over-the-counter energy financial derivatives. LITASCO SA has a full scale risk management department performing daily controls and analysis regarding price risk identification, measurement and mitigation.
Credit Risk Management
The Credit Risk strategy of LITASCO SA adheres to a conservative philosophy. All open credit lines LITASCO SA grants to our trading counterparts are formally approved by a Credit Risk Committee comprised of LITASCO SA's top management. Each transaction is monitored by LITASCO SA's Credit Risk Management team to ensure every transaction is concluded under the appropriate credit terms. Furthermore, world events are closely monitored and immediate action is taken to mitigate any foreseeable credit risks. Last but not least, the Credit Risk Management team works closely with our trading counterparts to negotiate open credit for the LITASCO Group.
General Terms and Conditions
LITASCO SA as a major actor on the Oil Trading market implemented in 2007 new General Terms and Conditions (GTC's) reflecting current trading practices, covering all common delivery methods and applying to «spot» and «term» business traded.
Systems and Reporting
In line with LUKOIL Group strategy, LITASCO SA implemented SAP Enterprise Resource Planning application ("ERP"), becoming one of the first subsidiaries in the group to deploy it. The integrated platform is used to collect data for US GAAP and statutory reporting.
Two systems are used: A dedicated system for front and middle office that allows us to follow our trading positions as well as carry out the real time risk management function and SAP, which integrates back office accounting.
SAP BW Data Warehouse and OutlookSoft are the two pillars of LITASCO SA's management reporting.