Energy Commodity Risk Management Training Course

Duration 10 days 21 modules · 65 contact hours
Level Intermediate Certificate on completion
Who attends Energy Risk Managers, Commercial Managers and others
Fee from USD 2,200 KSh 190,000 for Kenyan organisations
Where 52 cities + online See dates by city
Next start 9 Nov 2026 Course code SD-RM-046

Before you join: Participants should understand basic financial statements, commercial contracts and the difference between a physical purchase or sale and a financial derivative.

Dates & prices

Two start dates a month in every city, and live online on weekdays or weekends. Fees are per participant; classroom fees include tuition, materials, lunch and refreshments, and the certificate.

Suggest a date or city

Showing the next six months. Later dates, other cities and private deliveries for your team are available on request.

Course overview

Energy companies earn margins from producing, transporting, storing, processing, buying and selling commodities, yet those margins can move sharply with oil, gas, power, LNG, coal, emissions and freight prices. Physical commitments also create basis, location, quality, timing, volume, counterparty and operational risks. A poorly structured hedge can protect one exposure while creating another, and weak controls can turn trading activity into an unapproved risk position.

This course develops the practical methods used to identify, measure, control and report energy commodity risk. Participants examine physical and financial positions, forward curves, futures, swaps, options, basis risk, credit exposure, liquidity risk and hedge effectiveness. They use risk appetite statements, position limits, value-at-risk, stress testing, cash-flow-at-risk, mark-to-market reporting and hedge accounting concepts to support commercial decisions. The course also addresses risk governance, trade controls, collateral, regulatory reporting and the role of energy trading and risk management systems.

Teaching combines instructor briefings with energy-market cases, pricing calculations, group analysis, trading simulations and structured application work. Participants build an energy risk register, exposure map, hedging strategy, risk limit structure, reporting pack and governance plan using realistic cases from oil and gas, power generation, LNG supply, refining and renewable energy portfolios. The final capstone requires participants to present a complete commodity risk management plan for an energy business.

The course suits commercial, finance, treasury, trading, operations and risk professionals who work with energy price exposure or need to challenge the controls surrounding it. It is particularly relevant to organisations moving from informal hedging decisions towards defined risk policies, documented controls and management reporting.

What you will be able to do

  • Identify physical and financial commodity exposures using a structured exposure map
  • Construct forward-curve price scenarios for oil, gas, power and LNG positions
  • Calculate mark-to-market, value-at-risk and cash-flow-at-risk measures
  • Design hedging strategies using futures, swaps, options and basis instruments
  • Evaluate hedge effectiveness, residual risk and hedge-accounting eligibility
  • Set risk limits, escalation thresholds and independent reporting controls
  • Assess counterparty credit, collateral and liquidity requirements for trading portfolios
  • Present a complete energy commodity risk management plan for management approval

Benefits of attending

For you

  • Ability to translate operational commitments into measurable commodity risk exposures
  • Confidence challenging proposed hedges, trading positions and risk-limit breaches
  • Practical experience selecting derivatives for price, basis and volume risks
  • Working knowledge of energy risk reports used by management and risk committees
  • A portfolio-ready commodity risk management plan and reporting pack

For your organisation

  • Clearer visibility of price, basis, volume and timing exposures
  • More disciplined hedge decisions linked to documented commercial objectives
  • Earlier detection of limit breaches, valuation disputes and collateral pressure
  • Better coordination between trading, treasury, finance, operations and risk teams
  • Stronger evidence for management oversight, audit review and regulatory obligations

Course modules

21 modules over 10 days

Participants can classify the principal commodity risks created by an energy business model.

  • Energy value chains, exposures and profit drivers in integrated energy businesses
  • Crude, refined products, gas, power and LNG market characteristics
  • Physical asset positions versus financial trading positions and mandates
  • Basis, location, quality, timing and volumetric exposure sources
  • Risk appetite translated into measurable commercial and treasury objectives
  • Daily risk reporting roles across front, middle and back offices

Participants can build an exposure map from physical contracts, assets and operating commitments.

  • Purchase, sales, transport and storage contracts as risk sources
  • Contract pricing formulas, index references and settlement timing analysed
  • Production profiles and outage assumptions incorporated into volume exposure
  • Inventory positions separated into operational, speculative and accounting perspectives
  • Map exposures by commodity, delivery point, month and contract counterparty
  • Exposure registers linked to contract terms, asset data and forecasts

Participants can interpret forward curves and explain their effect on physical and hedge values.

  • Spot prices, forward prices and futures prices distinguished clearly
  • Contango and backwardation interpreted through storage and convenience yield
  • Forward curve construction from exchange settlements and broker quotations
  • Calendar spreads measured between prompt and deferred delivery periods
  • Location spreads explained through pipeline constraints and transmission congestion
  • Curve shifts, twists and dislocations linked to portfolio valuation

Participants can select and value basic futures and swap hedges for commodity exposures.

  • Exchange-traded futures contract specifications, tick values and delivery months
  • Hedge ratios calculated from forecast physical volumes and contract units
  • Fixed-for-floating swaps matched to purchase and sales pricing formulas
  • Daily variation margin effects on cash requirements and liquidity
  • Closing, rolling and offsetting positions under changing physical forecasts
  • Futures basis risk measured between hedge instrument and exposure index

Participants can compare option-based hedges with fixed-price instruments and explain their trade-offs.

  • Calls, puts and option premiums linked to buyer protection objectives
  • Collars, caps and floors assessed for budget certainty and upside
  • Strike selection based on risk appetite, forecast confidence and affordability
  • Option payoff diagrams built for producer, consumer and trader positions
  • Volatility, time value and moneyness explained without pricing-model assumptions
  • Structured hedges reviewed for embedded obligations and residual exposures

Participants can identify residual risks that remain after a standard commodity hedge.

  • Benchmark mismatch quantified between local physical prices and traded contracts
  • Location basis exposure traced through hubs, terminals and delivery points
  • Quality differentials analysed for crude grades and refined products
  • Generation intermittency and demand uncertainty measured in power portfolios
  • Volume risk separated from price risk within hedge performance analysis
  • Cross-commodity hedges tested using historical correlation and commercial logic

Participants can produce a basic position report and mark-to-market valuation for an energy portfolio.

  • Long and short positions aggregated by commodity, location and month
  • Open exposure distinguished from nominated, settled and cancelled quantities
  • Mark-to-market calculated using forward prices, contract prices and volumes
  • Realised and unrealised profit and loss separated in reporting
  • Independent price verification sources assessed for liquid and illiquid markets
  • Valuation adjustments documented for bid-offer spreads and model uncertainty

Participants can interpret value-at-risk results and their limitations for energy portfolios.

  • Value-at-risk purpose, confidence levels and holding periods defined
  • Historical simulation value-at-risk calculated from commodity price returns
  • Parametric value-at-risk assumptions tested against non-normal energy price behaviour
  • Monte Carlo simulation introduced for options and nonlinear portfolios
  • Value-at-risk decomposed by commodity, desk, tenor and risk factor
  • Limitations exposed through jumps, illiquidity, correlation breakdowns and model risk

Participants can design stress scenarios that test earnings and liquidity under severe market moves.

  • Historical stress scenarios drawn from price shocks and market disruptions
  • Hypothetical scenarios combine curve shifts, basis widening and volume losses
  • Cash-flow-at-risk measures forecast cash variability under adverse price movements
  • Margin calls and collateral forecasts integrated into liquidity stress tests
  • Reverse stress testing identifies conditions that breach risk appetite
  • Management actions documented for stressed positions and funding shortfalls

Participants can prepare a hedging strategy aligned with commercial objectives and risk tolerance.

  • Hedging objectives distinguished from speculation, optimisation and directional trading
  • Layered hedging schedules matched to forecast reliability and decision horizons
  • Minimum and maximum hedge ratios set through risk appetite limits
  • Instrument selection compares liquidity, basis fit, collateral and optionality
  • Execution windows and delegated authorities specified within hedge mandates
  • Residual exposures reported after each proposed hedge transaction

Participants can assess hedge effectiveness and identify key IFRS 9 documentation requirements.

  • Economic relationship assessed between hedged item and hedging instrument
  • Hedge ratio documented from actual quantities and risk management objectives
  • Cash flow hedges distinguished from fair value hedges
  • IFRS 9 designation documents prepared before hedge accounting begins
  • Sources of ineffectiveness identified through basis, timing and volume mismatch
  • Rebalancing and discontinuation triggers recorded under hedge documentation requirements

Participants can evaluate counterparty exposure and define appropriate credit and collateral controls.

  • Potential future exposure estimated from replacement cost and market volatility
  • Credit limits assigned using financial strength, ratings and concentration
  • Netting agreements reviewed for enforceability, scope and close-out provisions
  • Credit support annex mechanics explained through thresholds and margin calls
  • Wrong-way risk identified when counterparty health follows commodity prices
  • Aging reports escalate overdue receivables, disputes and collateral deficiencies

Participants can forecast liquidity needs arising from trading, hedging and collateral arrangements.

  • Initial margin, variation margin and option premium cash flows mapped
  • Liquidity ladders combine operational cash flows with derivative settlement dates
  • Funding stress scenarios test adverse prices, ratings changes and collateral calls
  • Working capital effects of inventory, receivables and payables analysed
  • Treasury facilities assessed against peak margin and seasonal funding requirements
  • Collateral optimisation considers eligible assets, haircuts and concentration restrictions

Participants can design a control structure for authorised commodity trading and hedging activity.

  • Delegated authorities define permitted products, tenors and transaction sizes
  • Position limits separate gross, net, intraday and overnight exposures
  • Stop-loss limits linked to realised losses and escalation procedures
  • Independent middle-office checks reconcile deals, positions and valuations
  • Trade capture controls require timely confirmation and amendment approval
  • Limit breaches investigated through root-cause analysis and documented remediation

Participants can specify the core data, reports and reconciliations required for risk oversight.

  • Energy trading and risk management system data flows mapped
  • Trade capture fields cover product, index, volume, location and tenor
  • Market data governance assigns sources, approvals and stale-price controls
  • Daily position reports reconcile commercial systems, settlements and general ledger
  • Risk dashboards present exposures, value-at-risk, limits and stress results
  • Data quality exceptions tracked through ownership, deadlines and resolution evidence

Participants can identify regulatory and conduct controls relevant to energy commodity activity.

  • EMIR reporting obligations considered for relevant derivative transactions
  • Dodd-Frank swap requirements compared with applicable business activities
  • REMIT market abuse indicators examined for European wholesale energy markets
  • Inside information controls applied to outages, capacity and supply disruptions
  • Trade surveillance reviews unusual orders, cancellations and pricing behaviour
  • Record retention supports audit trails, dispute resolution and regulatory enquiries

Participants can analyse commodity exposures specific to crude supply, refining and product sales.

  • Crude grade differentials linked to refinery yield and procurement exposure
  • Crack spreads measure refinery margin sensitivity to product prices
  • Product inventory hedges aligned with storage turnover and sales commitments
  • Freight exposure assessed through voyage terms and fuel price relationships
  • Refinery outages modelled through lost throughput and replacement purchases
  • Blending economics tested against quality specifications and index differentials

Participants can assess the distinctive market and operational risks of gas, LNG and power portfolios.

  • Gas hub prices compared with indexed supply and customer contracts
  • Take-or-pay clauses assessed for volume flexibility and downside exposure
  • LNG destination flexibility valued through regional spreads and shipping costs
  • Power shape risk measured between baseload, peakload and generation profiles
  • Transmission congestion creates nodal price risk and hedge mismatch
  • Weather scenarios connect demand forecasts, renewable output and balancing costs

Participants can incorporate carbon and renewable generation risks into a commodity risk framework.

  • Emissions allowance positions linked to compliance obligations and generation output
  • Carbon price risk assessed within fuel-switching and dispatch decisions
  • Renewable power purchase agreements analysed for volume and basis exposure
  • Guarantees of origin and renewable certificates tracked through contract obligations
  • Curtailment and negative pricing scenarios tested for renewable asset revenues
  • Transition assumptions documented within longer-term risk and investment decisions

Participants can draft governance documents and management reports for commodity risk oversight.

  • Commodity risk policy defines objectives, scope, authorities and prohibited activities
  • Risk appetite statements connect board tolerance with operating limits
  • Risk committee terms specify membership, decisions and meeting cadence
  • Exception reports distinguish breaches, approvals, remediation and recurring weaknesses
  • Key risk indicators selected for market, credit, liquidity and operational risks
  • Board reports explain exposures, hedge performance and material management actions

Participants can build, review and present a complete energy commodity risk management plan for a defined business portfolio.

  • Define the portfolio business model, commercial objectives and risk appetite
  • Build a contract-based exposure map covering price, basis and volume risks
  • Value physical and derivative positions using documented forward curve assumptions
  • Select hedges, limits, stress tests and collateral controls for approval
  • Prepare risk committee reporting with exposures, scenarios and management actions
  • Present the plan, defend assumptions and respond to review challenges

Exercises and examples are adapted to each cohort's sectors and roles.

What you take back to work

  1. Energy commodity exposure map template
  2. Commodity hedging strategy template
  3. Value-at-risk and stress-testing model
  4. Trading limits and escalation matrix
  5. Counterparty credit and collateral checklist
  6. Risk committee reporting pack

Who should attend

  • Energy Risk Managers — need formal methods for measuring, controlling and reporting commodity exposure
  • Commercial Managers — need to convert supply, sales and asset commitments into hedge decisions
  • Treasury Managers — need to manage liquidity, collateral and financial derivative obligations
  • Energy Traders — need disciplined position controls, valuation methods and limit monitoring
  • Finance Managers — need to assess valuation, hedge accounting and earnings effects
  • Operations and Supply Managers — need visibility of physical risks created by contracts and assets

Skills and tools covered

Commodity exposure mappingHedging strategy designMarket risk measurementTrade control designCounterparty credit assessmentRisk reporting

Tools and standards

Value-at-Risk, IFRS 9, EMIR, ISDA Master Agreement

How the course runs

Training methodology

The course uses short technical briefings followed by worked energy-market cases, spreadsheet-based calculations, group discussions and decision simulations. Participants analyse physical supply and sales commitments, build exposure maps, value derivative positions and test hedge alternatives against changing forward curves. Cases cover oil, gas, power, LNG, refining and renewable portfolios. Facilitators use management reporting examples, risk committee scenarios and control failures to connect market concepts with operational decisions. Each participant develops material relevant to their own role throughout the course.

Requirements and prerequisites

Participants should understand basic financial statements, commercial contracts and the difference between a physical purchase or sale and a financial derivative. Familiarity with energy products, procurement, trading, treasury, accounting or commercial operations is useful. Participants should be comfortable working with percentages, cash-flow tables and simple spreadsheet calculations. Prior experience with futures, options, value-at-risk or hedge accounting is not required. The course explains core market terminology before applying more advanced risk measurement and hedging methods.

A typical training day

08:30 – 10:30First session
10:30 – 10:45Refreshment break
10:45 – 12:30Second session
12:30 – 13:30Lunch and networking
13:30 – 15:00Third session
15:00 – 15:15Refreshment break
15:15 – 16:30Workshop and daily review

Live online deliveries follow the same structure in East Africa Time, with shorter screen blocks and longer breaks.

What the fee includes

  • Instruction by a practitioner facilitator
  • Full course workbook and materials
  • Exercise files, templates and case studies
  • Refreshments and lunch on classroom deliveries
  • Certificate of completion
  • Post-course application plan

Frequently asked questions

You should understand basic commercial contracts, financial statements and spreadsheet calculations. Experience with energy trading, derivatives, value-at-risk or hedge accounting is useful but not required.

Bring a laptop if possible, as participants work with pricing, exposure and reporting examples. You may also bring non-confidential examples of contracts, hedging policies or risk reports from your organisation.

It is designed for professionals in energy risk, trading, commercial management, treasury, finance, operations and supply. It is also suitable for managers who approve or oversee energy hedging decisions.

This course focuses on physical energy markets and the risks created by assets, supply contracts, sales commitments and commodity derivatives. It addresses basis, location, quality, volume, margining and energy-market conduct controls in detail.

Participants build exposure maps, hedging strategies, risk reports and control structures that can be adapted for their own portfolios. The methods apply to oil, gas, power, LNG, refined products, carbon and renewable energy commitments.

Each training day runs from 08:30 to 16:30 and provides about 6.5 contact hours. The first week establishes exposure, pricing, hedging and measurement methods; the second week covers controls, governance, sector applications and the final capstone.

Questions about this course?

Ask about dates, fees, group bookings or running it for your team. Our training team replies by email.

Ask on WhatsApp info@skillsetdevelopment.com

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