Ann: Annual Report 2018, page-301

My take, from some experience,....

WPL operate an existing portfolio in oil (and LNG) supply chain. They have producing assets plus probably some contracts too and use these to forward sell. They try & balance their supply & demand position, probably long supply for 2022 and close out as get closer. If there are any issues on either supply or demand side, e.g. seasonal fluctuations, plant maintenance, hurricanes, electric vehicles, FM events, whatever, they have to be long/short as a consequence or balance with spot purchases, These can be financial or physical i.e spot or short contract markets or physical cargoes. That's why we have oil traders doing many monthly futures contracts.

As you say operating a large portfolio offers advantages of options but disadvantages of commitments and timing and open exposure if supply demand not balanced (this could be positive or negative depending on oil prices). If any delay occurs and oil prices are low, ok to let slip for a few years and cover from spot/contract purchases but if oil high depends if they are short production and sold long (I have no idea), but could get a squeeze.

Far have no such exposure at this time as have not forward sold SNE (they may do some of this through financing arrangements though) and not depending upon it (yet) to deliver portfolio commitments...but they do need cash flow to start. Once they have financing Far will have an exposure to SNE defaulting and I expect contracts may say contracts pay any shortfall at spot prices.

cheers