The Marketing Department is in charge of selling Perenco's oil and gas production. From collecting information, which is indispensable to anticipate market and clients’ needs and trends, to negotiating, which requires relational skills but above all a full understanding of the functioning and stakes of the sector; marketing objectives are to maximise the selling price of production while managing the risks associated to the sale of crude and price volatility. To achieve this it needs to broaden relationships with new consumption regions and develop innovative partnerships.
Acting upstream on production or product variations
Upstream, Marketing mission is to anticipate and influence the quality of crude. To do so, department works with all the company operational departments and with pre-project.The crude products have fundamental characteristics defined by geology. It can only be modified in a refinery, however choosing to mix different qualities of crude from different fields, or decide to improve crude characteristics through an adequate process, is a possibility. Marketing department can also work on the minimum specifications of the terminal, which permits to optimise logistics to target the natural market of the product and thereby improve its selling price.
For example, by installing loading buoys on two of African terminals, it enables Perenco to access the Chinese market by VLCC (Very Large Crude Carrier) and to significantly improve the differential of these crudes thanks to shipping savings - at a time when the historical market of these crude (Atlantic Basin) was closed because of new competing products.Discover the FLNG projet
All of crude products are very accurately modelled in order to simulate their profitability in each refinery throughout the world, depending on the local price of by-products and installations. This allows to target buyers and estimate potential purchasing prices. Crude must therefore conform to the specifications Perenco communicates to the market. Should a modification ever occur Marketing department has to anticipate, simulate and communicate these changes so as to preserve the crude reputation and thereby its value. In the event of a significant change in quality, Perenco is forced to consider new markets.
Developing an open commercial strategy
The qualities of crudes reflect Perenco often mature, varied or even scattered oil fields; they are very different and often niche in the market. As a consequence the Group has a very wide range of clients throughout the world, many of whom are specific to each type of crude.
Today, Perenco works with one hundred different clients, one third of them being regulars. Their profiles can vary a lot. Marketing department works with all the large integrated players (majors) as well as with all the large trading houses. But most of production is sold to refiners. This commercial approach is also open to new players who show an innovative approach.
Optimising value creation
Perenco mainly operates via call for tenders in order to be fair and maximise competition. Most of contracts are "spot" to promote flexibility and stick to the market but the Group can also have term contracts if they create value, for example on niche crudes.
The Marketing department also optimises the planning of liftings with our subsidiaries by taking their production estimates into account, in order to increase their value. Together with clients, department can successfully optimise their shipping costs by reducing their waiting times for vessels or by avoiding to deliver charges while a refinery is carrying out maintenance operations or finally by selling during the period that best promotes the price according to the market structure at that time.
The Marketing department also works on the sales of gas and LNG, on risk cover (hedging), attends regular meetings with the States to fix the tax prices of production-sharing contracts and if necessary may be called on transversal topics such as the trading aspect while evaluating potential new acquisitions.