Risk Management Basics
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Risk Management Basics

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Presentation made to Empowerment Serve's special knowledge session; introduction to risk management to young technical professionals with Engr AkaChi Kanu.

Presentation made to Empowerment Serve's special knowledge session; introduction to risk management to young technical professionals with Engr AkaChi Kanu.

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Risk Management Basics Presentation Transcript

  • 1. ISO’s Definition ISO 31000 Defines Risk Management as the effect of uncertainty on objectives, (whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate eventsor to maximize the realization of opportunities.
  • 2. Types of Risks • Financial • Project • HSSE • Legal • Business, etc • Operational • Economic • Commercial • Country • Social, etc
  • 3. Basic Concepts • Uncertainty • Issue • Opportunity / Downside risk • Sources of uncertainty • Consequence • Probability • Severity • Risk Management Process
  • 4. Uncertainty • Risk = “uncertainty that matters” • Upside risk (Opportunity) • Downside risk (Risk) • Probable (P<1) • “Unknowns”
  • 5. Issue • Known events or facts • Certainties (P=1) • Existing/current situation • Sources of (future) uncertainties or risks
  • 6. Causes of Risk • Sources of uncertainty • Current situation (not possible future events) • Issues, facts, “ the knowns” (P = 1) • Specific, Contextual
  • 7. Consequences • Resulting events • Impact/Outcome • Severity • Cost
  • 8. Risk Tolerance
  • 9. Project Risks • Project Development – Project Risk Register – Project Cost Risks – Project Schedule risks • PEP & Contract Strategy • MOC • Close-out & Look-back Operations Risks • Pos Materials Management • Reliability • Quality Management • Production forecasting • Customer Service
  • 10. Process Safety • Engineering Safety – Bow tie review – Safety Integrity Level (HIPPS & other SCEs) – HAZOP • Pre Start-up Safety Review • Operating Procedures (SOPs) • MOC • Incident Investigation, etc Some Useful Codes/Standards • API RP 14C • API RP 14J • API RP 500/505 • IEC 61508 • UKOA • NFPA
  • 11. Risk Register No Event Title Description Original Probabil ity Original Impact Original Risk (Probability/ Impact ) Mitigation Plan Realized Risk (Probabi lty x Event Category / Owner Date 2 None discovery Impact of absence of commercial oil on field development strategy. H H H/H All available data will be incorporated by the subsurface team to model the reservoir. M/H Reservoir Engineering Sep-10 3 Personel Safety Safety & security of workers and host communities are of primary importance to project success and company reputation. H H H/H HAZID to be carried out in Define phase L/H HSE Sep-10 4 New technology H H H/H Expert assessment of New Tech option(s). M/H Technology Sep-10 5 Cost overun Cost overuns wil impact on project NPV and IRR. M H M/H Complete detailed cost estimates and implement robust cost control. L/H Project Engineering Sep-10 6 Project delay Project delays will increase costs, defer start-up date and impact on project IRR. M H M/H Complete detailed schedule estimates, identify critical path and long lead items. L/H Project Engineering Sep-10 7 Commercial agreement Developing Commercial Strategy that will suit the stakeholders. H H H/H Project Manager to issue clear T&Cs to all stakeholders. M/H Commercial Sep-10 8 Regulatory Policy Changes Changes in local regulatory policies H H H/H Lobby government officials to realise implications of policy summersault to business and economic growth. H/H 9 Gas price Plunge in international oil/gas price will lower expected IRR M H M/H M/H Commercial Sep-10
  • 12. Exercise (Group) Identify 5 sources of uncertainties, risk events and consequences for a given scenario (project, operations, plan, structure, organization, etc) List should include at least 2 upside risks
  • 13. Risk Management Process • Identify • Assess • Communicate • Prioritise • Analyse • Respond Can be done in cycles and recycles
  • 14. Risk Identification Tools & Techniques • TECOP • SWOT • PESTEL • HAZID, HAZAN, • HAZOP (Guide Words + Experience) • Checklist (review applications) • Forms and templates • SMEs Interview • What-if (E.g in MOC) • Delphi Technique, • Crawford Slip • Event/Fault Tree (Incident Investigation)
  • 15. Qualitative Assessment • Qualitative • Subjective • Quick (Acid Test) • Preliminary • Quantifiable • Most commonly used
  • 16. Quantitative Assessment (QRA) • Detailed • Objective/verifiable • “Sensitive”
  • 17. Risk Matrix (HSE Risks Example)
  • 18. Exercise 3 (Individual) Identify two risk events from exercise 2 using the metalanguage. Bring your answer to next session of Empowerment Serve
  • 19. IR - The risk imposed on an individual, which takes into account his/her occupancy or work pattern within the vicinity of the prescribed hazard, usually expressed as Individual Risk Per Annum (IRPA). LSIR - the risk for a hypothetical individual who is positioned at that location for 24 hours a day 365 days per year. Since in reality people do not remain continuously at one location, LSIR is a notional risk measure SOCIETAL RISK - generally used to describe multiple injury accidents/fatalities, or to describe risks to unnamed‘ individuals, which could include the public and is usually described by F-N Curves ALARP – “As Low As Reasonably Practicable” Examples in Safety QRA