Risk Management in Oil and Gas Industry - Revision history

Tkokotas at 15:41, 18 December 2018

2018-12-18T15:41:50Z

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			''Developed by Konstantinos Lymperis''


	Oil and Gas industry is one of the most critical operations in the production sphere. Therefore, every state of the art technology and methodology is implemented straight into the highly demanding management and production processes. Project Management [https://en.wikipedia.org/wiki/Project_management] techniques and especially Risk Management [http://apppm.man.dtu.dk/index.php/Risk_management][http://apppm.man.dtu.dk/index.php/Project_Risk_Management_and_Project_Risk_Management_Processes][http://apppm.man.dtu.dk/index.php/Management_of_risk#cite_ref-0], are widely used in order to provide appropriate responses to the emerging cross disciplinary risks; environmental, technical, financial and managerial. Risk Management is a systematic handling of the potential risks and is divided into the Risk Management Planning, Risk Identification [http://apppm.man.dtu.dk/index.php/Risk_Identification], Risk Analysis[http://apppm.man.dtu.dk/index.php/Risk_analysis], Risk Response Planning and Risk Control processes.		Oil and Gas industry is one of the most critical operations in the production sphere. Therefore, every state of the art technology and methodology is implemented straight into the highly demanding management and production processes. Project Management [https://en.wikipedia.org/wiki/Project_management] techniques and especially Risk Management [http://apppm.man.dtu.dk/index.php/Risk_management][http://apppm.man.dtu.dk/index.php/Project_Risk_Management_and_Project_Risk_Management_Processes][http://apppm.man.dtu.dk/index.php/Management_of_risk#cite_ref-0], are widely used in order to provide appropriate responses to the emerging cross disciplinary risks; environmental, technical, financial and managerial. Risk Management is a systematic handling of the potential risks and is divided into the Risk Management Planning, Risk Identification [http://apppm.man.dtu.dk/index.php/Risk_Identification], Risk Analysis[http://apppm.man.dtu.dk/index.php/Risk_analysis], Risk Response Planning and Risk Control processes.
	The purpose of the article is to describe the Risk Management toolset and techniques, present and analyse their recent performance in the Oil and Gas industry.		The purpose of the article is to describe the Risk Management toolset and techniques, present and analyse their recent performance in the Oil and Gas industry.

Konstantinos Lymperis: /* The structure */

2015-09-29T00:51:19Z

The structure

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	===The structure===		===The structure===
	The structure of the internal executive committees, looks similar to the previous two organizations. However, an extreme risk like the Mexico Gulf Oil spill is encountered by a ~~seperate~~ committee devoted only on this matter. In terms of response it seems like a serious attempt to response to the risk.		The structure of the internal executive committees, looks similar to the previous two organizations. However, an extreme risk like the Mexico Gulf Oil spill is encountered by a separate committee devoted only on this matter. In terms of response it seems like a serious attempt to response to the risk.

	===Potential Risks===		===Potential Risks===

Konstantinos Lymperis: /* Risk Management */

2015-09-29T00:50:37Z

Risk Management

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	===Risk Management===		===Risk Management===
	The risk management is planned in a yearly basis, but with the possibility to reshape it even more often if an unexpected risk is encountered.		The risk management is planned in a yearly basis, but with the possibility to reshape it even more often if an unexpected risk is encountered.
	The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement ~~nessessary~~ improving corrections or even discontinue an activity.		The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement necessary improving corrections or even discontinue an activity.

	==Conclusions==		==Conclusions==

Konstantinos Lymperis at 00:49, 29 September 2015

2015-09-29T00:49:50Z

← Older revision		Revision as of 00:49, 29 September 2015
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	The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.		The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.

			==Conclusions==
	One major observation is that the risk scope, effect and categorization is defined by each company separately according to the nature of the organization. For example for dong it was important to measure the effect on value and creditability, whereas for Maersk it was important to monitor the internal cash-flow relationship.		One major observation is that the risk scope, effect and categorization is defined by each company separately according to the nature of the organization. For example for dong it was important to measure the effect on value and creditability, whereas for Maersk it was important to monitor the internal cash-flow relationship.
	Furthermore, the top risks could vary from general, market risks up to very specialized important projects. Also, the formation of specific committee that evaluates BP's response to the major Mexico Gulf Oil Spill, is a state-of-the-art crisis management tool.		Furthermore, the top risks could vary from general, market risks up to very specialized important projects. Also, the formation of specific committee that evaluates BP's response to the major Mexico Gulf Oil Spill, is a state-of-the-art crisis management tool.

Konstantinos Lymperis: /* Conclusion */

2015-09-29T00:47:19Z

Conclusion

← Older revision		Revision as of 00:47, 29 September 2015
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	The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.		The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.

	~~==Conclusion==~~		One major observation is that the risk scope, effect and categorization is defined by each company separately according to the nature of the organization. For example for dong it was important to measure the effect on value and creditability, whereas for Maersk it was important to monitor the internal cash-flow relationship.
			Furthermore, the top risks could vary from general, market risks up to very specialized important projects. Also, the formation of specific committee that evaluates BP's response to the major Mexico Gulf Oil Spill, is a state-of-the-art crisis management tool.
			Finally the procedure of tracking, reporting, evaluating and managing emerging risks can also vary.

	==Annotated bibliography==		==Annotated bibliography==

	<references />		<references />

Konstantinos Lymperis: /* Introduction */

2015-09-29T00:33:55Z

Introduction

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	==Introduction==		==Introduction==
	Risk Management is a vital part for Oil and Gas enterprise. Despite the over-a-century experience of production, the accidents and the downfalls seem to occur endlessly. The risks are described by diversity, multi-factor roots and high level of complexity and uncertainty. This article's purpose is to review the mindset in the industry via case study scenarios and present a compilation of the toolset currently implemented.		Risk Management is a vital part for Oil and Gas enterprise. Despite the over-a-century experience of production, the accidents and the downfalls seem to occur endlessly. The risks are described by diversity, multi-factor roots and high level of complexity and uncertainty. This article's purpose is to review the mindset in the industry via case study scenarios and present a compilation of the toolset currently implemented. It must be noted that the development of the industry is via major projects that include the upstream and the mid stream of the production, hence the demand of high quality performance can be achieved only via succeful project management.

	==Risk Categories==		==Risk Categories==

Konstantinos Lymperis: /* Introduction */

2015-09-29T00:24:48Z

Introduction

← Older revision		Revision as of 00:24, 29 September 2015
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	==Introduction==		==Introduction==
	Risk Management is a vital part for Oil and Gas enterprise. Despite the over-a-century experience of production, the accidents and the downfalls seem to occur endlessly. The risks are described by diversity, multi-factor roots and high level of complexity and uncertainty. This article's purpose is to review the mindset in the industry via case study scenarios and present a compilation of the toolset currently implemented.		Risk Management is a vital part for Oil and Gas enterprise. Despite the over-a-century experience of production, the accidents and the downfalls seem to occur endlessly. The risks are described by diversity, multi-factor roots and high level of complexity and uncertainty. This article's purpose is to review the mindset in the industry via case study scenarios and present a compilation of the toolset currently implemented.

	==Risk Categories==		==Risk Categories==

Konstantinos Lymperis: /* Case study: BP */

2015-09-28T23:39:45Z

Case study: BP

← Older revision		Revision as of 23:39, 28 September 2015
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	===Potential Risks===		===Potential Risks===
	~~The risk management is planned in~~ a ~~yearly basis, but with the possibility to reshape it even more often if an unexpected risk is encountered.~~		a)Gulf of Mexico oil spill
	~~The current risk management is focused on the effects~~ of ~~the major oil spill of the~~ Mexico ~~Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation,~~ oil spill ~~effects mitigation, reputation restoration, compliance with government agreements and settlements. Other potential risks:~~		b) strategical and commercial risks that could emerge such as geopolitical risks (eg situation at Ukraine on 2014),
	a) strategical and commercial risks that could emerge such as geopolitical risks (eg situation at Ukraine on 2014),		c) Strategic and commercial risks (Prices and markets, Access, renewal and reserves progression, Major project delivery, Geopolitical, Rosneft investment, Liquidity, financial capacity and financial, including credit,
	b) Strategic and commercial risks (Prices and markets, Access, renewal and reserves progression, Major project delivery, Geopolitical, Rosneft investment, Liquidity, financial capacity and financial, including credit,
	exposure, Joint arrangements and contractors, Digital infrastructure and cybersecurity, Climate change and carbon pricing, Competition, Crisis management and business continuity and Insurance).		exposure, Joint arrangements and contractors, Digital infrastructure and cybersecurity, Climate change and carbon pricing, Competition, Crisis management and business continuity and Insurance).
	c) Safety and operational risks (Process safety, personal safety, and environmental risks, Drilling and production, Security, Product quality)		d) Safety and operational risks (Process safety, personal safety, and environmental risks, Drilling and production, Security, Product quality)
	~~and d~~) Compliance and control risks (US government settlements, Regulation, Ethical misconduct and non-compliance, Treasury and trading activities and Reporting)		e) Compliance and control risks (US government settlements, Regulation, Ethical misconduct and non-compliance, Treasury and trading activities and Reporting)

	Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.		===Risk Management===
			The risk management is planned in a yearly basis, but with the possibility to reshape it even more often if an unexpected risk is encountered.
			The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.

	==Conclusion==		==Conclusion==

Konstantinos Lymperis: /* Case study: BP */

2015-09-28T23:36:44Z

Case study: BP

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	==Case study: BP==		==Case study: BP==
	~~===Organization structure===~~
	[[File:BP.png\|450px\|thumb\|right\|alt text\|'''Figure 4:''' Overview of the risk management structure at BP. <ref>http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf</ref>]]		[[File:BP.png\|450px\|thumb\|right\|alt text\|'''Figure 4:''' Overview of the risk management structure at BP. <ref>http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf</ref>]]
	BP[http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf] is ~~constructing the~~ risk management activities to three major categories: day-to-day risk management, business and strategic risk management and oversight and governance. Their relationship looks like a chain that has some individual parts and some connected. Especially the second one act like a communication pot between the facilities and the board.		BP[http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf] is organizes risk management activities at three major categories: day-to-day risk management, business and strategic risk management and oversight and governance. Their relationship looks like a chain that has some individual parts and some connected. Especially the second one act like a communication pot between the facilities and the board.

			===The structure===
			The structure of the internal executive committees, looks similar to the previous two organizations. However, an extreme risk like the Mexico Gulf Oil spill is encountered by a seperate committee devoted only on this matter. In terms of response it seems like a serious attempt to response to the risk.

			===Potential Risks===
	The risk management is planned in a yearly basis, but with the possibility to reshape it even more often if an unexpected risk is encountered.		The risk management is planned in a yearly basis, but with the possibility to reshape it even more often if an unexpected risk is encountered.
	The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements.		The current risk management is focused on the effects of the major oil spill of the Mexico Gulf which resulted a wide variety of risks. Legal strategy for litigation, environmental remediation, oil spill effects mitigation, reputation restoration, compliance with government agreements and settlements. Other potential risks:
	~~BP's 2014 portfolio also emphasizes on~~ strategical and commercial risks that could emerge such as geopolitical risks (eg situation at Ukraine on 2014).		a) strategical and commercial risks that could emerge such as geopolitical risks (eg situation at Ukraine on 2014),
	~~Regarding the major~~ projects delivery that contribute a lot the financial planning and cash flow balance, ~~it is noted~~		b) Strategic and commercial risks (Prices and markets, Access, renewal and reserves progression, Major project delivery, Geopolitical, Rosneft investment, Liquidity, financial capacity and financial, including credit,
			exposure, Joint arrangements and contractors, Digital infrastructure and cybersecurity, Climate change and carbon pricing, Competition, Crisis management and business continuity and Insurance).
			c) Safety and operational risks (Process safety, personal safety, and environmental risks, Drilling and production, Security, Product quality)
			and d) Compliance and control risks (US government settlements, Regulation, Ethical misconduct and non-compliance, Treasury and trading activities and Reporting)

			Major projects delivery that contribute a lot the financial planning and cash flow balance are encountered also as potential risk. Therefore, they are monitored closely throughout their life circle and evaluated with predefined indicators in order to implement nessessary improving corrections or even discontinue an activity.

	==Conclusion==		==Conclusion==

Konstantinos Lymperis: /* Case study: BP */

2015-09-28T23:02:09Z

Case study: BP

← Older revision		Revision as of 23:02, 28 September 2015
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	==Case study: BP==		==Case study: BP==
	===Organization structure===		===Organization structure===
	[[File:BP.png\|450px\|thumb\|~~left~~\|alt text\|'''Figure 4:''' Overview of the risk management structure at BP. <ref>http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf</ref>]]		[[File:BP.png\|450px\|thumb\|right\|alt text\|'''Figure 4:''' Overview of the risk management structure at BP. <ref>http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf</ref>]]
	BP[http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf] is constructing the risk management activities to three major categories: day-to-day risk management, business and strategic risk management and oversight and governance. Their relationship looks like a chain that has some individual parts and some connected. Especially the second one act like a communication pot between the facilities and the board.		BP[http://www.bp.com/content/dam/bp/pdf/investors/BP_Annual_Report_and_Form_20F_2014.pdf] is constructing the risk management activities to three major categories: day-to-day risk management, business and strategic risk management and oversight and governance. Their relationship looks like a chain that has some individual parts and some connected. Especially the second one act like a communication pot between the facilities and the board.