Oil and gas industry needs risk management technology, says IDC

Oil and gas firms lacking solutions that support transparency and understanding of risk

Oil and gas firms are lagging behind in their use of technology, claims IDC

Almost a third of oil and gas companies have not implemented an Energy Trading and Risk Management (ETRM) solution in their operations to date, according to research firm IDC.

The firm believes that this gap in business productivity is detrimental to oil and gas companies, claiming that ETRM solutions are essential to managing crude oil gathering and refined product operations.

In its Technology Assessment: ETRM in a Post-Recession Environment report, IDC also said that tight margins and the continued difficult financial environment means that it is essential to form a comprehensive view of crude purchases and physical logistics in order to turn 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," said Catherine Madden, senior research analyst at 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."