Energy Risk names J.P. Morgan "Oil & Products House of the Year"
Jul 01, 2011
Despite an uncertain economy and fluctuations in the global commodities market over the past year, J.P. Morgan was named "Oil & Products House of the Year," "U.S. Natural Gas House of the Year" and "U.S. Coal House of the Year" in the 2011 Energy Risk Awards.
The industry magazine for commodity traders and risk managers, Energy Risk, awarded the firm three of its top recognitions based on its significant inroads in the commodities space over the past year.
J.P. Morgan won the top oil and products house honor for its "innovative financing deals with refiners and state-owned enterprises, including the Egyptian General Petroleum Corporation," as well as the significant expansion of its physical oil capabilities through purchasing RBS Sempra Commodities.
The firm drove through several large tailored transactions to meet the needs of its clients despite the challenging climate that oil houses faced in 2010 with economic uncertainty weighing on demand. Many traditional hedgers and investors took a "wait-and-see" approach, Energy Risk noted, with a resulting slowdown in flow business.
The strong relationships the firm's commodities business has with corporate hedgers are an asset to its desk, the magazine stated. According to a recent poll of 309 global corporations by Greenwich Associates, J.P. Morgan has greater over-the-counter energy derivatives market penetration with corporates than any other dealer.
Separately, Energy Risk singled out J.P. Morgan's "robust deal-making activities" and the purchase of the North American gas business of RBS Sempra as key to the firm's being named U.S. Natural Gas House of the Year.
Purchasing RBS Sempra's North American power and gas business in the fourth quarter of 2010 significantly increased J.P. Morgan's natural gas footprint in the region. The firm now controls a diverse network of physical assets, including 70 billion cubic feet per day of storage capacity – an increase of almost 100% since the purchase – and almost double the transport capacity it had previously.
J.P. Morgan completed the acquisition in 55 days, closing the deal on November 30, 2010. Teams from across the bank assimilated all of RBS Sempra's commodity trades and the physical deals in place for the storage and transport side of the business.
In terms of the firm's U.S. coal business, J.P. Morgan was recognized for the transformational restructure of its coal business last year that allowed it to "increase the offerings of its U.S. business, integrate internationally and align itself better with changing market fundamentals."
The U.S. desk is now positioned to provide marketing support to domestic producers selling thermal coal internationally, Energy Risk stated, noting that this developing export market is a key area for the business.
The firm's infrastructure network includes completed and ongoing deals with providers that include barge companies, terminals and railroads for transportation through the East Coast, Gulf of Mexico and West Coast. As a result, the U.S. desk now can offer European and Asian clients more competitively priced, physically delivered North American products as well.