Risk Management

OQT has a robust risk management framework and control environment in place to mitigate the inherent risks of trading to a tolerable level for the organisation and the appetite of the OQ Group. OQT’s Board sets risk appetite through:

A group economic capital limit
Portfolio risk limits for different risk classes
A dividend distribution policy & minimum liquidity thresholds
Approved traded products and financial instruments

The CEO holds the authority to allocate and distribute risk capital within limits set by the Board. An approved risk limit registry is maintained, comprehensively documenting active trading mandates and an audit trail of all changes authorised.

The risk management framework at OQT contains a suite of risk management policies, procedures, and delegations. We rigorously apply the following key principles:

Compliance with all relevant risk policies and limits are monitored daily by the risk management function.
We act on breaches of policy and employ strict escalation procedures to ensure that both OQT and the businesses it operates in are adequately protected.
We appraise risk in our transactions and wider business activities on an on-going basis to ensure that actions are taken to address any changes in the risk profile of the group.
We ensure management have sufficient timely quantitative and qualitative information regarding the risks within the businesses through daily, weekly, and monthly risk reporting.

Through day-to-day trading activities, OQT assumes commodity price risks. Outright price risks inherent in our contracts to purchase or sell physical commodities are systematically hedged either through an offsetting physical position or by using financial instruments. Residual basis risk assumed is managed within approved limits. OQT takes a very prudent approach to counterparty credit risk. Limits are assigned by the Credit function for all trading counterparties, supported by additional concentration limits across the portfolio.

We have adopted a comprehensive vessel vetting policy that acts to mitigate any compliance or technical/operational related risks associated with our shipping activities or those of our suppliers and customers. We proactively identify and investigate high risk vessel activities prior to chartering as OQT or accepting any vessel nominations by our counterparties.

Acknowledging the inherent challenges present in the industry in which we operate, we have a structured and risk aware approach to conducting business. Combined with the depth of expertise and experience within the company, this allows for effective management of exposures, resulting in a reliable and trustworthy partner for our wide array of stakeholders.