Sergey Tereshkin, CEO of Oil Resource Group

The Russian commodities market is considered conservative. However, even here, it is understood that development and competition are impossible without digitalization. The CEO of Oil Resource Group shared how to transition from an ordinary oil trader to a high-tech company in commodity trading and asset management.

– How did Oil Resource Group start?
– I am originally from Crimea and came to Moscow for my studies. I started businesses in various fields, but at some point, I realized that in a resource-rich country, one should focus on resources. I got a job at a fuel company, studied the market for several years, and in 2014, I resigned and co-founded Oil Resource Group with a business partner.
Even then, we wanted to implement new business solutions in the rather conservative commodities market. Digitalization played a key role in this process.

– Where did you begin?
– First and foremost, we automated internal business processes. This allowed us to move away from manual management. We customized the 1C software to meet our specific needs, making operations across different departments more transparent and efficient. We also enhanced security by developing and automating a system for accrediting counterparties. One of the first results of digitalization was a significant reduction in costs—we started saving several million rubles per month.

– But you didn’t stop there?
– No, that wasn’t enough for us. We wanted to make a "quantum leap" and reach a new level. To do this, we needed to minimize human involvement in the sale of petroleum products.
This process traditionally involves seven different specialists—sales managers, logistics personnel, accountants, lawyers, and so on. We aimed to have software handle these functions.
This led to the idea of a mobile app for fuel ordering, followed by a commodity marketplace.
These products enable customers to order petroleum products 24/7 from anywhere in the world, without being dependent on a specific manager.

– How long did it take to develop the app and marketplace?
– We have our own team of developers. It took us four months to develop the first release of the app, and it has been continuously updated since then. Customers can not only place orders but also access price trend data, product photos, quality certificates, and refinery coordinates to calculate delivery logistics for self-pickup.

We developed the marketplace for seven months and spent another month fixing bugs. We are still working on improvements and adding new features.

Why is the marketplace more convenient and reliable than ordering through a personal manager?
We collaborate with companies that consume large volumes of fuel, making it unprofitable for them to purchase at retail gas stations at regular prices. It is more convenient for them to order large batches at wholesale prices with delivery. Some clients, such as coal mines or airports, require specialized types of fuel and petroleum products that can only be purchased from oil traders. These businesses typically have to call multiple suppliers, compare prices, check availability, negotiate discounts, and arrange delivery. Each step in this process involves intermediaries, each taking a cut.

Our marketplace streamlines the entire process, minimizing intermediaries and saving our clients time, money, and effort.

Does your platform operate like standard marketplaces for consumer goods?
Yes. You can access it via an app or browser. You see a list of petroleum products with real-time pricing from suppliers, product specifications, and delivery or pickup options. You select the necessary products, finalize the deal, and choose either delivery or self-pickup. Contract processing takes just a few seconds instead of the usual two to three days.

In your personal account, you can track the status of all transactions. All documents are stored there as well, eliminating the need to request them from a manager or supplier's accountant.

Who sells petroleum products and fuel on the marketplace?
These are oil refineries or large traders who work directly with manufacturers. Our multi-step accreditation system, which we initially implemented before even planning the marketplace, has been particularly useful. When placing an order, buyers can review information about the seller.

Currently, we work with refineries in Central Russia, but in the new year, we plan to significantly expand our geography and involve several vertically integrated oil companies.

For sellers, working with the marketplace is also beneficial. With fewer intermediaries, they can sell their products at higher prices while buyers pay less. Sellers also gain access to a diversified customer base rather than relying solely on large traders.

Do you offer credit or installment payment options like traditional marketplaces?
Yes, we understand that clients may urgently need fuel but may not always have the full amount available. That’s why we introduced installment payment options in May of this year. Initially, the installment limit was 1 million rubles, but in November, we increased it to 3 million rubles.

Installment applications are reviewed in as little as three minutes. No interest is charged for the first 30 days, after which the rate is 1.5% per month (18% annually). The loan interest rate ranges from 19-22% annually. In ten months, 76 transactions worth a total of 58,306,794 rubles were completed using this financing option.

We currently partner with Sberbank and plan to integrate Alfa-Bank by the end of the year. At the beginning of next year, we will start working with Tinkoff Bank. Our goal is to form a pool of 20 banking partners offering financial services, installment plans, and escrow accounts.

The marketplace has been operating for a year. What are the preliminary results?
Over the past year, 41,000 tons of petroleum products have been sold through the platform, generating approximately 2 billion rubles in revenue.

The project generates revenue through licensing fees for platform usage and additional modules. For comparison, Oil Resource Group's revenue in 2020 was 12.5 billion rubles. Currently, the platform hosts over 60 competitive supplier offers.

What are Oil Resource Group’s plans for 2022?
We plan to attract significant investment by issuing bonds. Right now, we are working on the loan structure, preparing issuance documents, and finalizing the release terms.


Translated using ChatGPT