Commodity trading companies - Centralizing trade

Commodity trading companies - Centralizing trade

This report aims at helping ENR companies understand the substantial benefits and risk management issues involved in these complex operations.

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Centralizing Trade

KPMG’s Commodity trading companies - Centralizing trade as a critical success factor report highlights the benefits of centralized commodity trading operations as many of the world’s biggest oil and gas and mining majors set up international trading structures to win competitive advantage. It is aimed at helping energy and natural resources companies understand the substantial benefits and risk management issues involved in these complex operations.

The report was developed based on the views of professionals from KPMG’s member firms worldwide who specialize in a range of global tax and advisory disciplines.

The combined insights show, the trend to greater centralization of commodity trading is likely to continue, and companies that take up this model with a sound structure that addresses tax and business risk stand to reap substantial benefits.

In reviewing the potential benefits of establishing specialized commodity trading entities and in assessing existing structures, companies face a range of complex questions:

  • What are the potential advantages of centralizing commodity trading operations?
  • What factors are most important when deciding where to locate the operations?
  • What are the tax risks involved, and what practical steps can be taken to reduce or eliminate them?
  • Over the long term, how could the trend toward centralized trading affect the oil and gas and mining industries, and individual companies and markets?  

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