International energy company, Statoil, has implemented new trade finance arrangements over the past two years that has involved the consolidation of its letter of credit (L/C) management.

The new arrangements have proved successful according to a case study sponsored by Nordea and published by Euromoney

Robust system
Statoil, the world’s third largest net seller of crude oil, typically receives around 700 to 1,000 L/Cs each year, according to Statoil’s head of credit, Gunnar Steinsson.

He says Statoil needs a robust trade finance system, which gives us all the information the Norwegian oil company requires in one place, but that Statoil has relationships with around 15 core banks.

Competitive tender
Two years ago, the company invited its core banks to participate in a tender to become its main trade finance bank.

All core banks submitted a tender and Statoil chose Nordea according to Steinsson because it “demonstrated the best competence and expertise in trade finance, and it has a strong presence in the main region in which we operate.”

Single L/C route
“We were also very impressed with the sophistication of Nordea’s electronic trade finance tools,” he added.

All Statoil’s L/Cs are now routed through Nordea, which checks an approved bank has issued each credit.