Since the inception of our activities in the executive search business, we have witnessed many changes in the power sector. Topics like liberalization, privatization, consolidation and legal unbundling required serious changes in our clients' organizational cultures and management structures. Some of the former major state-owned companies have been fully privatized, while others still list the state as a major stockholder. New players, especially within commodity trading, popped up – some disappeared after only a short time.
Although the market has more-or-less freely developed and the wholesale market is driven by market prices, economic and regulatory developments have made the definition of a model for success ever more elusive. The broader European electricity market has recently seen utilities seriously struggle, large industrials going into the electricity business, ongoing and seemingly never-ending liberalization processes stopped due to the economy, asset-holders desperately restructuring their portfolios; all accompanied by a general realization that the business has changed significantly.
Flexibility and ideas are paramount. Pockets of profitability are opening up in many areas; they are numerous but also smaller than before. To managers, the changes spell out risk and new opportunities at the same time.
GJP has been supporting the European power sector in recruiting top managers as well as specialists in the finance, commercial, risk and technical areas, as well as in a range of other corporate functions. We have set up trading floors from Front Office to Back Office including all Middle Office specialist functions.
The financial crisis triggered a rethinking and a re-evaluation of the financing strategies in the energy market. The focus has shifted to liquidity strategies, secured financing, cutting down and reduction of non-essential capital expenditure. In addition, changes in regulations, technological advancements, and the need to comply with environmental standards have increased the necessity to think-out-of-the box and find new niches when it comes to financial investments.
Consequently, major energy companies started their own corporate venture capital funds with the goal of investing in new technologies that can provide a breakthrough and shape the future of energy usage. In order to gain a new competitive advantage by making the right investments, it is crucial to have highly skilled experts who can look ahead and set the tone for the future.
Besides the technical and commercial knowledge in transactions, those candidates have to provide high personal integrity and confidentiality, an excellent relationship network within relevant regions, high competence in regulatory affairs and an awareness of current as well as future market trends.
GJP International supported the investment and banking sector by successfully recruiting various high-profile positions within energy finance. Among these roles were commercial and technical investment managers, M&A experts…
Gas market issues have taken up one of the central spots in the broader European energy landscape. New sources of gas have been uncovered in the upstream, new gas pipelines have been approved while some have been removed from the map, and the downstream gas market has moved toward a spot based pricing mechanism. Long-term supply contracts, once a reliable source of steady cash streams, have turned into the bane of modern utilities and gas storage has also witnessed a negative trend. While EU regulation suggests gas-fired power plants to be a crucial part of Europe’s future electricity mix, gas prices make major investments far from feasible.
The current trends and market fluctuations have made it only more obvious that success requires considerable skill, experience and an appropriate mindset.
GJP International successfully helped clients sift out key skills and talent in the past, and are exquisitely equipped with own skills and experience to assist their clients find the best and most appropriate people in the currently developing situation. We have placed candidates throughout the entire value chain, both in the past and recently, helping our clients to hire efficient managers and set-up successful teams at any point along the value chain.
For a long time, LNG has carried the promise to develop into a major source of gas supply for the European market – an expectation it has not lived up to yet. However, as a global commodity, LNG’s contribution to the world’s energy mix is growing. New liquefaction terminals are under development and regasification terminals are continuously being added, especially in developing countries. If the current rate of production keeps up, USA is expected to increase its export capacities on its way to potentially becoming the world’s largest gas producer.
Meanwhile, the outlook in Europe remains uncertain; not so much regarding the importance of LNG, but rather the timeline. The hopes peaked several times in the past decade, but unforeseen developments dampened promising growth. The impact of Fukushima diverted all cargoes to Asia for an extended period of time, until the drops in the gas price made LNG imports largely unfeasible anyway. Not to mention that the turbulence in the financial markets of recent years has made infrastructure investments more than difficult.
Without a doubt, LNG’s role on the world’s energy market is constantly gaining momentum, making Europe’s renewed interest a question of when rather than why. Eastern Europe, i.e. Turkey, seems to have a healthier LNG market at the moment than Western Europe, but the tables could turn swiftly once the prices allow for more flexibility.
GJP International have helped their clients find the right personnel both for the set-up of LNG activities as well as for the management and optimization of a diversified gas portfolio.
European crude oil comes from a wide range of sources including the North Sea, Russia and CIS, Middle East, and North and West Africa. A major source of energy, oil transgresses issues of local energy policy, becoming highly susceptible to global geopolitical trends. The last decade has been nothing less than a rollercoaster ride for the stakeholders of the industry; we were made to worry about peak oil and we watched production on major reservoirs come to a halt in the Arab spring, just for the pessimistic expectations to be flipped into optimism thanks to advances in technology and ability to access new giant fields.
Shale gas exploitation, improvements in subsurface imaging, in-situ molecular manipulation and many other topics are broad issues that have leapfrogged ahead in their conception and execution thanks to technological progress. With new issues ready to impact the long term prospects of the oil industry arising almost daily, whether in upstream, midstream or downstream areas, optimization of processes has come increasingly to the fore, both from a technical and commercial point of view.
Technology and commercial success however are only enabled through ideas and competences generated by the professionals working in this industry. Access to a skilled employee pool is gaining in significance daily, especially in the face of accelerated technological breakthroughs and quiet threats such as peak demand.
GJP International has served clients of varying sizes in this dynamic business, resulting in a string of successful hires at all levels, from Reservoir Engineers and G&G experts, to Business Developers, to Project Planners, etc…
Soft and Agricultural Commodities
While the trading of soft commodities used to be mainly a physical business – as most of these commodities grow traditionally in the tropics and have to be shipped for consumption elsewhere – it has become increasingly a market for financial trading and speculation. The principal soft and agricultural commodities that are traded include wheat, maize, soybeans, sugar, palm oil and rice and to a lesser extent orange juice, coffee, cocoa, cotton, and lumber.
Soft and agricultural commodities are renewable and yet there can be crisis situations impacting the supply balance. The futures market was started by traders dealing in grains almost 150 years ago. Since then, traders who were mainly farmers utilize futures as a means of locking-in prices while managing their inventories. As in any market subject to the laws of supply and demand, long term price trends influence the trading business and affect the growing global markets. Soft and agro markets are nevertheless relatively stable, as the growing world population needs staple food.
Moreover, grains are not just used for human consumption but also for feeding animals, manufacturing items, and producing bio-fuels. In fact, many of the soft and agricultural commodities such as sugar, grains, or palm oil are used to produce ethanol for bio-fuel. Ethanol production is expected to increase significantly and by 2022 biofuel production is projected to consume a great amount of world production of vegetable oils, grains, and sugar. Due to this synergy with energy and the increasing global trend towards renewable energy, many energy companies have started developing a soft and agricultural commodity trading business. Although most of the trading in these commodities is still divided between very few big companies, more and more players are entering the market.
GJP International has helped finding the right talent to successfully set up soft and agricultural trading desks.
Since 2012 we see, for the first time ever, a global reduction in renewable energy investments with a shift in activities from developed to developing countries. China especially increased its investments by over 20% as well as African or South American countries. Reasons for the investment drop in the Western hemisphere are mainly due to significantly lower solar prices, weakened economies and uncertainties in regulatory policy (e.g. changes in feed-in tariffs). The 20-20-20 package of the EU commission still aims to significantly decarbonize energy production in the EU. Nevertheless there are ongoing discussions to restore its declining competitiveness by supporting the development of cheap energy, including shale gas, while cutting green energy subsidies.
There is also a shift in investment size; while investments in small scale projects have increased, asset finance of large projects has slipped. As public market investors are hesitating in further investing in the renewable sector, some huge hedge funds are entering the European market due to low investment prices.
After recruiting in a first and second wave mainly Project Developer and highly specialized Technicians, in 2012/2013 we have recruited Investment Directors, Cleantec Fund Managers, Commercial/Technical Directors for growing the business in a specific region or area.
Infrastructure & Plant Engineering
Large-scale projects, no matter if it concerns off-shore, interconnectors, pipelines or power plant projects are facing major investment challenges, especially in Europe. Nevertheless much of the ageing energy infrastructure in Europe and abroad needs replacing and there is a great need for investment, especially in EU energy infrastructure. The EU estimates that there is a requirement for approximately €200 billion over the next couple of years, particularly concerning projects of common European interest. Huge energy investment projects will also develop in the emerging markets, especially sub-Saharan Africa, China and South America.
Within the area of power plant engineering, GJP International has placed many positions from Head of Engineering to all level of Technical experts or Technical and Commercial Director Power Plants. In high demand are international experts familiar with technical and financial due diligence for large projects and management of engineering services including all planning activities and civil engineering aspects. Furthermore GJP International has been heavily involved in recruiting managers and high level experts for on-and off-shore pipelines as well as LNG terminals or storage facilities.
Additionally GJP experts were involved in senior search mandates for pulp & paper and steel industry.