EnergyAsia interview with FAME and The Oxford Princeton Programme

FAME has made a name for itself providing traders from the energy and financial markets trading analysis tools, charting systems and data from information vendors. Increasingly, it is also sought after as a trainer for energy executives around the world. With 300 professionals at its offices in New York, London, Singapore, Toronto, Houston, Oxford and Princeton, FAME is well positioned to serve Asia's fast-growing demand for energy data, analysis tools and training. Simon Metcalfe, its Asia Pacific manager, gives EnergyAsia an update of its activities.

1. To most traders, FAME supplies trading analysis and charting systems and aggregation of market data from different sources. The education component (The Oxford Princeton Programme) seems to be secondary on their minds. Is this an issue for FAME?

"The Oxford Princeton Programme was formed in 2000 by the merging of The College of Petroleum and Energy Studies and Princeton Energy Programme (cumulatively with over 30 years previous experience of training individuals). As a division of FAME Information Services, the Programme has trained and educated tens of thousands in the energy, commodity and derivatives industries. The Oxford Princeton Programme greatly compliments FAME's core software and data management business.

"FAME's energy business has always been about helping traders to understand the markets and make informed decisions. We started out (in 1987) with the PAWS® analysis and charting system. Then we added our Energy Data Service to provide traders with a unified database of quality-checked market data from many different sources.

"Later, we addressed the needs of larger trading organisations by developing complete data management solutions like EnergyServer and referencePoint. The education services developed as a natural complement to these software and data offerings.

"The software, data and education services are all ways in which FAME helps energy traders do their jobs."

2. In our last interview a year ago, you ended by stating: "As with any growing company, The Oxford Princeton Programme is exploring options in and around the Asia-Pacific rim. Stay tuned to what future endeavors might bring in Asia." What are these new endeavours?

"We are continuing to explore those options in the region. We have had great success with our instructor-led courses in Singapore. We've recently developed an instructor-led classroom course specific to the Asian marketplace. Titled 'The Chemicals Shipping Market - Chartering and Operations (TD3)', the course uncovers the intricacies involved with the chemicals shipping industry in Asia.

"We've also worked toward creative training solutions for the Asia-Pacific rim. Our newly formed arrangement with Winglish.com, an English education service to the Korean market, has contracted The Oxford Princeton Programme to provide a series of training seminars to the Korean Electric Power Company (KEPCO). Within the agreement, the Programme will provide energy training to the upper-management of KEPCO following an intensive business-management programme being conducted at the University of Pennsylvania's Wharton School of Business. This is particularly beneficial as South Korea undergoes deregulation.

"We have other opportunities and arrangements in the pipeline that use similar creative ideas to offer our leading-edge training solutions to the Asian marketplace."

3. Do you see education overtaking the products component as the main revenue generator?

"FAME has a number of business areas that contribute to overall profitability. As well as the education business and purpose-built energy market analysis products like PAWS and EnergyScope TM , we obtain revenue from our data aggregation services, from sales of technology components like the FAME time series database, from large systems integration and development projects carried out by our professional services teams and from data management outsourcing services.

"The energy market is an important sector for FAME but we are also a leading provider of data management solutions to the financial markets and to central banks and government agencies."

4. What proportion of your customers is from the energy sector? Do you expect the financial and other sectors to contribute to your future growth faster than energy?

"FAME's business is split between the energy sector, the financial markets and our "public sector" customers - central banks and government statistical agencies. The balance of new software and data sales naturally tends to fluctuate between the energy and financial sectors depending on the state of the markets.

"All the markets are becoming more active again, in particular the power, gas and oil sectors. Our fastest growth right now is coming from the new referencePoint TM suite of data management capabilities. Using referencePoint, FAME is building enterprise-wide information integration solutions for both financial and energy organisations.

"We expected that financial markets, with their enormous historical and reference data requirements, would be the main market for referencePoint, but we've found that energy organisations, particularly utilities and grid operators, need help managing both operational and market data.

"While The Oxford Princeton Programme has been known as the world's leading provider of training solutions to the energy industry, we are leading the way in training individuals and organisations on the commodities and derivatives industries as well. Because many different levels within any given company need to have the skills and know-how in these industries, our training is applicable to anyone such as the IT and legal departments, new hires, marketing, and even members of the board."

5. What is Asia's contribution to the group's revenue? Your expectations for the future?

"Asia has always been an important region for FAME in both energy and financial markets and across the whole range of software, data and education services. We've had a substantial office in Singapore for over 10 years, with local staff providing support to our Asian customers. In the early days, a lot of our business in this region was with the branch offices of American and European companies, but we're increasingly helping national and independent Asian companies with their market analysis, data management and educational requirements.

"There has also been rapid growth in scheduling public training programmes from The Oxford Princeton Programme in Asia. Due to increased demand for energy and derivatives training in the region, we have gone from one course in 2002 to 16 courses in Singapore this year."

6. Are you seeing increased business from an increasingly deregulated oil, gas and power markets in Asia? Where, in which countries, what type of business?

"The deregulating energy markets are key growth areas for all aspects of FAME's business. The largest new markets for our services currently are in the gas and power markets. As these markets open up, we see a strong demand for our education services. The Oxford Princeton Programme's experienced faculty and lecturers have well over 500 years cumulative industry experience and have been educating organisations on the deregulated energy markets.

"This has been especially true for those in deregulating nations of the Asia-Pacific rim. The demand for our education services in deregulated markets is usually followed by a need for data services and analytical systems such as EnergyScope as companies get involved in active trading."

7. Where do you see the largest growth for your business, in terms of regions/countries, and products? Please elaborate.

"As well as the gas and power markets, we're still seeing continued steady growth in traditional markets such as oil and petrochemicals trading. Our original software product, PAWS, now in its 7th major version, has over 2,000 users around the world and still attracts new installations on a regular basis.

"Our newest product, a Forward Curve module for EnergyServer, is attracting a lot of attention for its unique and user friendly way of capturing, managing and analysing forward market prices. Our core educational products, courses on the fundamentals of trading, derivative instruments and energy markets, are also selling strongly. Additionally, new course development at The Oxford Princeton Programme has been strong over the past few months as the markets begin to heat up again.

"Our success in the deregulating energy markets has also been accompanied by regional growth. Australia and Korea are growth areas as the power markets liberalise. China is a new market for us and, for the first time this year we ran an onsite training course in China. At the same time we've been selling deeper in existing markets in the Middle East, Japan and Singapore."

8. What do you see are future challenges and problems that might limit your growth? Increasing competition as more companies enter the business, lack of qualified people willing to become instructors?

"Success breeds imitation and there are competitors seeking to match FAME's offerings in both the software and education sides of our business. It's probably a good thing to have some competition to keep us on our toes. We've always put a lot of effort into understanding the needs of our customers and developing products (whether software or training solutions) that meet those needs, and we believe this approach will keep us in a market-leading position.

"Keeping up with changes in the energy industry is always a challenge - whether it's new markets opening up, changes in the role of price assessments, new sources of information, new trading instruments, regulatory changes, or whatever.

"Our data coverage is continually expanding and our software regularly gets new features such as forward price curve management tools. With courses on subjects like credit risk, trading controls and workplace ethics, our education services aim to keep individuals abreast of current concerns and issues in the markets."

9. How do you assess customer satisfaction? Have customers cancelled your services, and for what reasons? How have customers expressed satisfaction with your services?

"We regularly monitor customer satisfaction through close contact with our clients to solve them before they become problems. We also run user group meetings and carry out surveys to get feedback on the direction that customers would like our products to take. Naturally, we get some cancellations, but these are nearly always due to reorganisations or mergers within the customer organisation. Ultimately our customers express their satisfaction with our services by renewing their software subscriptions and rebooking training courses, and we have very high rates of renewals and repeat business.

"Many of our customers have used our services for years and we regularly make new sales through referrals and as a result of trading personnel moving from one company to another. This customer satisfaction was also endorsed when FAME was voted "Best Data Management Vendor" in the Waters Awards 2003."

10. Are you planning to eventually make your training certifiable to degree level or diploma? Given Asia's obsession with paper qualifications, do you think having a Degree in Oil Trading or Oil Broking is on the cards?

"This is already in place as delegates can maximise their learning experience with our Gold level of Natural Gas and Oil Trading courses by signing on to our Diploma Programme (the Gold level of The Oxford Princeton Programme is presented by The College of Petroleum and Energy Studies).

"Delegates simply choose the courses they wish to study (which must total between 18-23 days) and at the end of each courses, they will receive an "open book" examination to be marked by the course director.

"Following the successful completion, the delegate is awarded a non-accredited Diploma from The Oxford Princeton Programme." - end -

Simon Metcalfe is Senior Manager at FAME Information Services in Singapore.
e-mail: smetcalfe@fame.com

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