Job at time of interview: Principal and Head of Commodities and Energy Trading Risk Management, KPMG UK
Shale gas has changed the face of the global energy sector, and increased the chance of energy independence in the U.S. and a few other countries that traditionally have been dependent on exports. On electricity generation, renewable energy has had a dramatic impact due to government subsidies. A decade of investment in renewable sources of energy including wind, solar, and bio fuels will continue to change the energy mix.
The ability to constantly identify, measure, model, monitor, communicate, and manage risks effectively. Being a catalyst for promoting a risk culture across all levels in an organization is also essential to being a successful energy risk manager.
I help clients in the energy and utility industry change the way they operate in order to better manage risk and improve business performance. I consult on risk management, business performance and regulatory impact issues across oil, gas, power, LNG, soft commodities, and metals.
I had three months to study and was helped by my practical background knowledge. I found GARP's recommended 15-week study plan useful in staying focused on the timetable, as well as keeping the studying interesting. I studied two to three hours late at night and, with support from my wife and kid, 12 to 14 hours a day on most Sundays.
CPD is a good mechanism to ensure ERPs keep themselves updated on developments in the energy risk space and thus stay relevant in this fast-changing risk environment.
Don't underestimate the difficulty of the exam. Keep notes on difficult concepts and formulas and allocate time for revision prior to taking the exam.
I travel across the world, and having a globally recognized energy risk designation helps. Also, during the learning process I gained an appreciation of new concepts, which helped expand my perspective on energy risk.
Regulatory concerns and economic uncertainty are the top two. Most impacted firms have already initiated programs to navigate the transition through this regulatory change. The regulations are all interconnected and sometimes not clearly defined. The challenge is for clients to thoroughly understand the impacts and recognize the themes and interdependencies that run between each of the regulations. This will allow them to maintain flexibility, drive synergies and reduce implementation costs. In terms of adapting to economic uncertainty, clients need to change the way they operate, which at times means looking at risks and converting them to new opportunities to generate the sales revenue and profits they are used to historically.
I think gaining an ERP certification means that the individual demonstrates professionalism, dedication and passion for the energy risk profession. Having an ERP demonstrates that the candidate has the necessary skills to better understand risks in the energy supply chain and how these interact with the financial, market, and regulatory environment.
Personally, I feel that the ERP provides the skills and knowledge that are relevant for our energy risk consulting engagements. I am planning to include this as a certification we would like a candidate to have when applying at KPMG's energy risk management consulting practice.
The ERP helped me fill in the gap between a macro understanding of risks, gained from my MBA, and a detailed understanding of cause-effect relationships, gained from my chemical engineering degree. I don't think there is any other professional qualification more suited to energy risk management than the GARP ERP.
I started my career 15 years back at a large energy company, initially within the commercial department of the refinery and later as a risk manager within the international supply and trading division, which was responsible for hedging refinery margins and energy price risk. My first test as a risk manger was how I dealt with Enron. This was the middle of 2001, and our traders wanted to execute derivative transactions with Enron. My team was responsible for negotiating the ISDA master agreement and we were awaiting documents from Enron, which was delaying the process. After two months the rumors about Enron started making the rounds, and luckily this further delayed the process. We fortunately never transacted with Enron!
Working in a consulting environment is very challenging and I had limited time available to prepare for the ERP Exam. This resulted in me postponing my exam date a couple of times. Having a discussion with my management and agreeing to prioritize studying for the exam was key to my success.
CPE is a good mechanism to ensure ERPs keep themselves updated on developments in the energy risk space and thus stay relevant in this fast-changing risk environment.
I had been involved with GARP in different facets during the course of my career. In 2009, when GARP announced that they were planning to introduce an Energy Risk Professional certification, I knew this was the one I needed to expand and formalize my passion and knowledge for energy risk management.