Customers' credit watched more closely - BP

21 October 2008 17:30  [Source: ICIS news]

LONDON (ICIS news)--Producers are watching more closely how they manage the credit of their customers due to uncertainties in the global financial market, a BP official said on Tuesday.

“We have to have a new level of enquiry,” said Steven Welch, chief operating officer, international businesses refining and marketing segment at BP.

He added that there had not been a significant rise in write-offs, but that at least one large customer had run into financial trouble lately.

However, he added that pulling credit away from a significant customer could create an awkward position, so this was a sensitive issue.

On Friday, Norway's Yara, which more than doubled third-quarter net income to Norwegian kroner (Nkr) 3.36bn ($504m, €378m) from the year-earlier period, also said its customers were facing credit problems and uncertainty had grown.

The company’s chief financial officer Egil Hogna said commodity markets had been hit by a withdrawal of cash, mainly by hedge funds and other financial investors.

“Our customers are also facing credit problems,” he said.

Traders in the European chemicals market have previously said they were asking new non-European customers for prepayment or confirmed letters of credit.

($1 = €0.75) ($1 = Nkr6.63)

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By: Hilde Ovrebekk
+44 20 8652 3214

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