CNOOC Limited was keen to implement a treasury management system, however the company was facing a number of key issues that needed to be addressed before any implementation could take place. The project set out to address the following inefficiencies:

• Real-time monitoring of bank account closing balance and bank transaction processing were not realised; manual processing of account reconciliations was laborious.

• Daily operations involved numerous manual processing, were inefficient, and operational risks were high.

• Lack of appropriate online internal risk control.

• The major aspects of the centralisation of cash had already been realised, but there was still room to improve cash centralisation.

• There was no single integrated platform to file, record, and manage the data and files of treasury businesses.

As Xiaofeng Huang, General Manager, Treasury Department, CNOOC Limited explains “Treasury operations needed to be more integrated so we selected AvantGard Treasury System.”

The system structure at CNOOC Limited was rather complex and business modules were numerous. Additionally, the implementation involved CNOOC Limited’s ERP, budgeting system (Hyperion) and direct connections with more than ten banks. In order to ensure a successful project implementation, CNOOC Limited’s treasury department deployed key members of the business and IT team to set up a strong joint-project team.

Huang comments, “Through comprehensive planning of the project and working closely with the internal ERP project team, budget planning project team and co-operating with external banking partners, the project went live after one‑year and has realised its pre-set objectives.”

By implementing a TMS, CNOOC Limited has been able to raise its treasury management operations in China to a new level. A single front, middle, and back-office treasury operation platform with comprehensive treasury functionality and advanced system structure has been built.

“It’s an honour for CNOOC Limited to be the recipient of an Adam Smith Award and that means our continuing efforts to run our treasury business in accordance with international best practices over the years have paid off.”

Host-to-host connections with CNOOC Limited’s partner banks, connectivity with SAP, Bloomberg, and Hyperion have also been realised, thereby improving STP rates. Through the connection with banking systems, the company can realise real-time (or interval) monitoring of cash; automation of bank reconciliations also improved the responsiveness, accuracy of daily transactions and also improved the reliability of short-term cash flow forecasting.

Furthermore, through the introduction of the ‘Cash pool’ management tool, CNOOC Limited has been able to further enhance treasury management centralisation, leverage on the scale of its cash position, and improve the efficiency of its cash.

On the back of this, CNOOC Limited has built a strong risk management and control system, which provides comprehensive risk management tools and approaches, and allows for quantitative analysis of risk exposure, thereby improving CNOOC Limited’s risk control competence. As such the company can now meet company internal compliance and SOX 404 regulatory requirements. At the same time, CNOOC Limited can also meet the requirements of international accounting standards and automation of accounting for daily treasury activities.

In summary, the TMS implementation has provided CNOOC Limited with a powerful IT tool to enhance and improve treasury management. As Huang concludes, “The success of this project is one of the milestones in promoting the advancement of China corporate treasury management as a whole.”