New IDC Energy Insights Survey Reveals 31% of Oil and Gas Companies Lack Usage of Energy Trading and Risk Management Solutions ; Gaps in Exploiting the Benefits of ETRM Solutions Create Exposure
FRAMINGHAM, MA – July 20, 2010 – IDC Energy Insights today announced the availability of a new report, Technology Assessment: ETRM in a Post-Recession Environment (Doc #EI224023, July 2010). According to survey respondents, 31% of oil and gas companies have not implemented an Energy Trading and Risk Management (ETRM) solution in their operations to date.
IDC Energy Insights believes that this gap in business productivity creates exposure for oil and gas companies, and that ETRM solutions are essential to managing crude oil gathering and refined product operations. Additionally, tight margins and the continued pressure of a post-recession environment makes a comprehensive view of crude purchases and physical logistics essential to turning a profit. At the same time, oil and gas companies that want to position themselves for long-term growth require flexibility to accommodate scale, and robust components that include storage and hedging activities.
"Oil and gas companies are dependent on ETRM applications to get a complete view of their portfolios, which supports greater transparency and understanding of the level of risk the enterprise is exposed to as market conditions continue to fluctuate," stated Catherine Madden, senior research analyst, IDC Energy Insights. "The ability to protect against a fall in prices and be able to take some advantage of price increases, which provide hedging in the derivatives market, is invaluable to planning, budgeting, and financing."
ETRM applications are involved with trading physical and financial energy commodities and include both transactional and analytic applications. These applications cover business processes from deal capture to settlement and include trader tools, risk management, credit risk management, bidding and pricing strategy, forecasting, settlement and pipeline nominations, and other logistics unique to the oil and gas industry.
IDC Energy Insights forecasts ETRM IT Spending in North America in 2010 will reach $273.9 million.
The report presents the results of IDC's Vertical Research Annual Survey of Oil and Gas Companies, and IDC’s Worldwide Oil and Gas Industry IT Spending Guide. Additional drivers to ETRM solutions acquisition include:
* Proposed legislative regulations are expected to have a direct impact on oil and gas companies’ internal and external reporting requirements, including the supply of data necessary for a comprehensive portfolio view.
* New financial regulations are expected to have an impact on trading, especially with regard to position limits and clearing of over-the-counter trades. It also remains on the table that a cap and trade system could be passed into law by the end of 2010.
* Given the competitive advantage held by peers that adopt up-to-date technology, outdated technology is simply unsustainable. It should be considered that the investment required for ETRM technology is often less than the long-term costs for an organization that does not operate efficiently or have a comprehensive approach to mitigating risk.
The report reviews how cloud computing can provide several benefits in this environment including rapid deployment and low start-up costs. Additional information covered in the report includes a forecast for IT spending on ETRM investments and an overview of emerging trends in this market.
Join the discussions in the IDC Energy Insights Community; read Catherine Madden’s blog post here.
For additional information about this study, or to arrange a one-on-one briefing with Catherine Madden, please contact Sarah Murray at 781-794-3214 or email@example.com. Reports are available to qualified members of the media. For information on purchasing reports, contact firstname.lastname@example.org; reporters should email email@example.com
About IDC Energy Insights
IDC Energy Insights provides research-based advisory and consulting services focused on market and technology developments in the energy and utility industries. Staffed by senior analysts with decades of industry experience, IDC Energy Insights covers both the utility and oil & gas segments – providing independent, timely, and relevant analysis focused on key business and technology issues. IDC Energy Insights serves a diverse and growing global client base, including electric, gas and water utilities, IT suppliers, independent power producers, retail energy providers, oil and gas companies, equipment manufacturers, government agencies, financial institutions, and professional services firms. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-ei.com [http://www.idc-ei.com], email firstname.lastname@example.org, or call 508-935-4400. Visit the IDC Energy Insights Community at http://idc-insights-community.com/energy [http://idc-insights-community.com/energy].