CASE STUDY

Conducting Financial Risk Assessment for a Company in the Petroleum Industry to Increase Additional Cash Flows

May 30, 2019

Despite increasing dependencies on oil and gas services, companies in the petroleum industry are facing a plethora of financial risks. Download this free resource to identify the different types of financial risks faced by companies and steps taken by them to overcome such risks.

Increasing volatility in the UK has impacted almost every industry. However, companies in the petroleum industry are facing operational challenges. They have become vulnerable to commodity risks apart from becoming susceptible to factors such as facing currency fluctuations, interest rates, borrowing rates. These risks are not only compelling companies to conduct financial risk assessment but also to devise strategies that can help them sustain economic margins.

The Business Problem

Know how a leading petroleum company in the UK collaborated with SpendEdge to conduct a financial risk assessment and increase the cash flow in the company. As the client was focusing on obtaining additional financing, they needed to increase their cash flows to sustain planned capital expenditure. In addition, the client wanted to increase their growth rate to expand operations. The key objectives they were looking to achieve through this engagement were:

  • Develop the company’s reserves.
  • Create additional sources of finances.
  • Track fluctuating oil prices and ensure shareholder returns.

Want to know how financial risk assessment process can analyze risks pertaining to crude oil prices? Request a free demo from our experts and know how they can guide you with real time market insights.

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  • Develop a risk profile and rate them into the category of 1 to 7.
  • Gain €3-4 billion of additional cash flows from asset disposals.
  • Monetize recent exploration successes and reserves.
  • Identify customers’ doubtful account and set provisions for them.
  • Define policies and tools to manage the company’s exposure to financial risk.
  • Formulate a repayment plan and avoid losses of €0.2-0.3 billion.
  • To know more about financial risk assessment solutions, request more information.

Solutions Delivered

The experts at SpendEdge collaborated with the client and conducted a financial risk assessment. They adopted a top-down approach and found out the maximum tolerable amounts of risk exposure for the client. This helped the client to manage the company’s financial risks amidst weakening crude oil prices. Also, it enabled the client to optimize their risk profile and sustain profit margins despite the depreciation of the US dollar against the euro.

The financial risk assessment conducted provided necessary insights to the client for developing effective investment strategies. This aided the client to gain financial flexibility and achieve additional cash flows of €3-4 billion. Moreover, managing credit risks further helped the client to establish repayment plans and save the company from significant losses.

Fluctuating crude oil prices significantly impact the growth of petroleum companies. Request a free proposal and access our complete portfolio of financial risk assessment solutions.

Why SpendEdge:

SpendEdge delivers robust, real-time financial risk assessment solutions that helps sourcing and procurement professionals to improve risk management process. Our financial risk assessment solutions help enterprises to transform the structural capabilities of businesses and optimize risk profile. Our state-of-the-art financial risk assessment solutions help enterprises to transform structural capabilities, improve execution efficiency, and manage credit risks. We provide businesses with actionable insights and techniques to sustain their position in the industry. Moreover, our experts provide the latest industry news, supplier updates, and innovation landscape to help the client analyze financial risks and achieve additional cash flows.

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