Director General of Enron Gas Services (EGS), a subsidiary of the largest U.S. integrated natural gas company, said the risks and the possibility of selling a variety of natural gas derivatives, both built in gas supply contracts, and as a free-standing financial contracts. Over the three years of the EGS were successful, offering buyers and sellers of natural gas, a lot of innovative contract pricing. In order to reduce risks, inconsistencies between its obligations under the purchase and sale of gas, EGS created to put all their obligations in a number of different risks of exposure. Its centralized risk management group does not only measure the impact of the firm, but also enter into financial contracts to offset the impact caused by the business activities of the firm. "Hide
by Peter Tufano, Sanjay Bhatnagar Source: Harvard Business School 27 pages. Publication Date: Mar 04, 1994. Prod. #: 294076-PDF-ENG
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