Engineering Europe

Interview With An Originator: Beyond The Trading Desk At BP

Written by Imran Yusuf | Engineering Europe | Monday 20th May 2013 14:46:00 GMT

Manel Avella started as a Research Engineer, but via the Columbia MPA he's now a Senior Originator at BP.

Manel Avella says the Originator's job is to extend the reach of the trading desk.

Manel Avella says the Originator's job is to extend the reach of the trading desk.

What does your role as Senior Originator involve day-to-day?
My role as Senior Originator within BP's Gas & Power trading business is two-fold.
 
First to bring in day-to-day business flow for the traders, providing BP with access to customers and counterparts that do not operate in the usual organised commodities markets – be it because of the complexity of the product they seek or their lack of market access.
 
Secondly, our job is to develop assets and/or structures to provide the trading business with tools.
 
Let me explain in more detail...
 
As Senior Originator, my job consists of facing the gas and power markets and trying to bring in, for our trading team, deals, structures or assets that will generate value for the business. The type of transactions we usually deal with range from facing customers who lack direct market access via the usual platforms for very standard deals to more complex, structured, cross-commodity transactions, including asset development or acquisitions.
 
It is a highly commercial role, where deep knowledge of local energy markets is needed as well as strong analytical skills.
 
How do commodity markets work? Who are the players?
Commodities markets are like other markets: a lot of trading happens on screens and a trader is an analytical person behind the screen, reacting to market fluctuations and deciding to trade for hedging, arbitraging or taking directional positions. However, in all those markets, but especially the commodities market, there’s a lot of things also going on off-screen.
 
For example, there might be a small power plant in France which needs to hedge part of its production. This company, like a lot of other players, doesn’t have the same set-ups as traders in their offices. So what an Originator does is bring in the things happening ‘off-screen'. One of the tasks of the Originator is to be in contact with these parts of the market.
 
Another example of what an Originator does is related to the complexity of the products that are traded. On-screen trading covers mostly standard or ‘vanilla’ products, but there are more complex products and structures in the world as well.
 
In the commodities world these deals might include: very long-term products, location or time swaps, cross-commodity deals, options and even small acquisitions. For such structures the Originator is in contact with the counter-parties and puts together the deal both internally and externally, coordinating all required functions such as trading, operations, legal, credit, compliance, analysis, pricing, and so on.
 
In short, it’s the job of the Originator to extend the reach of the trading desk.
 
How does it fit in with the rest of BP’s business?
The job of BP's Traders is to stay in front of the screen and permanently monitor markets to manage their positions and capture opportunities. As Originators, we provide the trading team with access to markets beyond the screens, widening the range of options and counterparties accessible to them.
 
We also design and transact bespoke products for them to manage risk more efficiently. The Origination activity provides great support and value to the core trading as it helps protecting against unexpected market moves while enhancing market access.
 
What skills and personality do you need to do well in Origination?
Being a commercial role, a sense of human contact with network building and negotiation skills is very necessary. Deep knowledge of the commodities markets you operate in is a must, to be able to identify and capture opportunities.
 
Finally, as some of the deals we work with are highly complex and structured, strong analytical skills are a big plus.
 
You started out as research engineer – is that a typical path to becoming an Originator?
It is not a typical path, although an engineering background with some operational experience in energy markets is very common way to access this type of role. I am a strong believer in quantitative and technical background to access complex, energy-related roles such as this. In my case, my work as Research Engineer in electricity markets, plus a more operational experience managing power assets have been key for my success as Originator.
 
You studied engineering in Spain and France. Were these good experiences?
I am Spanish and started my engineering training at home. Very soon my passion for other cultures and languages helped me apply for and get a double degree exchange program at a top French Engineering school and moved there for two years. It was a fantastic, rich and very valuable experience, one of the best decisions I ever made. I loved it so much that I stayed in France for six years.
 
An early move to discover other cultures, people, school systems is an eye-opener, highly-educational personal and professional experience. I think a year abroad should be mandatory in a graduate curriculum.
 
You did the MPA at Columbia – why did you choose that programme? How did it work out for you?
It might sound a bit frivolous but actually my main driver to go to Columbia was the city of New York – after my first visit, I just loved it and wanted to live there. Then I worked to make it sensible: I found a specialisation in International Energy Management and Policy at the School of International and Public Affairs (SIPA).
 
It turned out to be a great program and an awesome school and I managed to get a scholarship for the Public Administration Master program building on my passion for Energy matters.
 
A Columbia degree opens many doors, particularly an MPA at the beginning of the financial crisis (I lived through the fall of Lehman in NYC), with the rise in profile at the time of public and multilateral institutions, as well as NGOs. The UN, World Bank, IMF, and many non-for profit were hiring massively to cope with the economic upheaval worldwide, and my profile was of interest.
 
However I decided to go back to Europe and continue with my previous career in the private sector for a while.
 
What are the hot topics in the industry that undergrads applying to BP should know about?
An undergrad applying to BP should be aware of the dynamics and geopolitics of the global energy market, including topics such as global LNG market rise, the shale gas glut in the US, demand stagnation in Europe and the high energy appetite in Asia. These and some others are going to shape the global energy markets in the future, as gas increases its importance in developed and developing economies.
 
Does BP offer internships in the Origination team?
We don’t offer internships as an Originator because this role requires entering into commitments on behalf of BP and might require various authorities' clearance. However, there can be internships or entry-level roles in support functions that work directly with Originators, such as Market Analyst, Business Developer, and so on. We have a team of people that help us. If you’re interested, everything is available online, as BP is very transparent. Every single position needs to be advertised, both externally and internally.
 
How did you land your first job with GE Medical Systems?
I interned there as electrical engineer at the end of my studies, and afterwards they offered me job and stayed there for over two years designing medical robots.
 
Apart from your current role, which one was your favourite?!
I liked them all! And I am sure my favourite role will be the next one!
 
You are fluent in four languages (English, French, Spanish, Catalan). How has this helped your engineering career?
Actually I have also learnt Italian recently in order to communicate with our Italian office and counterparts. Languages are a key skill in a globalised world, especially in commercial roles. Being able to communicate effectively with the people you work with is almost as important as the technical knowledge.  I wouldn’t have succeeded in any of my jobs without my language skills.
 
You’ve lived in London, New York, Madrid and Paris. Where next?
I really don’t know, I feel that I didn´t spend enough time in the US, and Latin America is very attractive to me. However there are also some amazing cities near London and Spain like Rome, Istanbul or Berlin. Generally I am a bit sceptical about moving to a country where you cannot speak or at least properly learn the local language, hence would be less inclined to move to Asia, but hey, who knows?
 
Finally, I have seen some of your fantastic photography. When did you develop this passion?
I have always liked photography and just recently switched to digital. I developed the passion by reading and seeing a lot of photographs and by taking some courses, but ultimately by carrying a camera all over and taking a lot of pics. Nonetheless I am just an amateur and spending more time with my photographs and publishing something are still in my 'to do' list.

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