Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 26 September 1995
Length: 27 pages
Data source: Field research
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Abstract
The CEO of Enron Gas Services (EGS), a subsidiary of the largest U.S. integrated natural gas firm, considers the risks and opportunities of selling a variety of natural gas derivatives, both embedded in gas delivery contracts and as free-standing financial contracts. In its three years of existence, EGS had been successful by offering buyers and sellers of natural gas a variety of innovative pricing contracts. In order to mitigate the risks of having mismatch between its commitments to buy and sell gas, EGS established a system to decompose all of its commitments into a handful of different risks of exposures. Its centralized risk-management group not only measures the firm's exposures but also enters into financial contracts to offset the exposure brought about by the firm's business activities.
Location:
Industry:
Size:
USD6.3 billion revenues, 1,100 employees
Other setting(s):
1993
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Length: 11 pages
Portuguese language
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 26 September 1995
Revision date: 5-Apr-2019
Length: 30 pages
Data source: Field research
About
Abstract
The CEO of Enron Gas Services (EGS), a subsidiary of the largest U.S. integrated natural gas firm, considers the risks and opportunities of selling a variety of natural gas derivatives, both embedded in gas delivery contracts and as free-standing financial contracts. In its three years of existence, EGS had been successful by offering buyers and sellers of natural gas a variety of innovative pricing contracts. In order to mitigate the risks of having mismatch between its commitments to buy and sell gas, EGS established a system to decompose all of its commitments into a handful of different risks of exposures. Its centralized risk-management group not only measures the firm's exposures but also enters into financial contracts to offset the exposure brought about by the firm's business activities.
Settings
Location:
Industry:
Size:
USD6.3 billion revenues, 1,100 employees
Other setting(s):
1993
Related
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Length: 11 pages
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 26 September 1995
Revision date: 5-Apr-2019
Length: 30 pages
Data source: Field research