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Neptune Energy is an independent global E&P company with operations across Europe, North Africa and Asia Pacific. With investments and operations across eight countries, Neptune Energy employs more than 1,300 people and aims to store more carbon than is emitted from its operations and the use of its sold products by 2030.
The business focuses on achieving sustainable growth by optimizing operational efficiency, increasing productive capacity and growing its international presence.
Neptune Energy routinely benchmarks its treasury function, with the mission to be in the top quartile across all dimensions of best practice treasury operations. To achieve this goal, Neptune Energy seeks continuous improvement in areas such as cash visibility, cash forecasting, funding efficiency, hedging effectiveness, liquidity management, investment performance and payment processing, among others.
Neptune Energy sought to improve operational efficiency and liquidity management by transitioning to a centralized structure. They needed to simplify their accounts payable account landscape and reduce the risk and fees associated with maintaining over 100 payment accounts across multiple regional banks. JP Morgan helped Neptune Energy achieve their goals with a single entity, multi-currency notional pool. Its embedded multi-entity virtual account structure centralized group settlements, including intercompany trade flows on a cashless basis.
With this solution, Neptune Energy consolidated their 100 plus physical bank accounts across five currencies to one per currency. They also leveraged virtual accounts for improved operational reporting. The notional pool enabled automated funding across currencies, reduced the need for foreign exchange swaps, and improved cash visibility and control. The result, Neptune Energy reduced bank account fees, rationalized its bank account landscape by over 90%, and standardized global account payable transaction types.
Thanks to the virtual account management structure, the business reduced treasury transfers by 75%. Neptune Energy also achieved faster reconciliation, better cash visibility, and optimized account closing processes, accelerating year end closing from five days to one. The solution earned Neptune Energy the 2022 Adam Smith Award for Best in Class Regional Global Treasury Solution. Now, Neptune Energy has a future proof liquidity management solution that can grow with their business. At JPMorgan, we're building innovative solutions now to scale for your future. Explore the possibilities.
To increase benchmark rankings Neptune focused on improving operational efficiencies, but faced two key hurdles:
The solution implemented by J.P. Morgan for Neptune Energy leveraged both traditional and innovative bank products to enhance the treasury operations of its in-house bank. It represents a best-in-class treasury solution that combined real-time cash pooling through on-behalf-of cash operations, an automated multi-bank cash concentration structure for entities and markets outside the in-house bank, and a single-entity multi-currency notional pool that optimized short-term cross-currency working capital.
“Our Treasury team has been able to achieve important cost reductions and operational efficiencies. These include a reduction of administrative, legal and operational fees, while achieving better visibility into bank charges and streamlining the reporting process.”
Neptune Energy’s project achievements have been recognized with a 2022 Adam Smith Award for the Best-in-Class Regional/Global Treasury Solution by Treasury Today. The solution, delivered by J.P. Morgan, led to impressive results across several areas of the business:
Strategic: By centralizing group payments, Neptune Energy reduced bank account fees and rationalized its bank account landscape by over 90%. The business reduced operational risk of fraud by centralizing payment activity through significantly fewer bank accounts.
Financial: Neptune Energy achieved centralized cash management operations without capital expenditure on vendor software solutions. As a result, the number of treasury funding movements executed through traditional bank clearing channels was reduced by over 80%, leading to reduced transaction fees and cashless intercompany settlements instead of cross-border wires.
Operational: By leveraging automation, Neptune Energy relieved several hours of manual effort per week, allowing resources to be reallocated to more strategic functions. The solution also increased internal efficiency through simplified transaction monitoring and standardization of the account payables process.
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