RiskyProject for Oil and Gas Industry

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How to use RiskyProject software for project risk management and risk analysis in oil and gas industry. …

How to use RiskyProject software for project risk management and risk analysis in oil and gas industry.

For more information how to perform schedule risk analysis using RiskyProject software please visit Intaver Institute web site: http://www.intaver.com.

About Intaver Institute.
Intaver Institute Inc. develops project risk management and project risk analysis software. Intaver's flagship product is RiskyProject: project risk management software. RiskyProject integrates with Microsoft Project, Oracle Primavera, other project management software or can run standalone. RiskyProject comes in three configurations: RiskyProject Lite, RiskyProject Professional, and RiskyProject Enterprise.

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  • To model schedule driven cost, we have included high level resources that have been assigned to specific tasks.

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  • 1. How to Perform Project Risk Management for Oil and Gas Projects Intaver Institute Inc. 303, 6707, Elbow Drive S.W, Calgary, AB, Canada Tel: +1(403)692-2252 Fax: +1(403)459-4533 www.intaver.com
  • 2. Introduction • Intaver Institute Timeline – 2002: Established – 2004: V.1 RiskyProject – 2009: v 3 Integrated Risk Register – 2012: v 5 • RiskyProject – Full Project Risk Management Lifecycle – Integrated Risk Register – Risk Matrix, Risk Planning + – Quantitative Monte Carlo Cost and Schedule Risk Analysis 05/07/14 2013 Intaver Institute 2 Clients
  • 3. Gorgon Natural Gas Project 05/07/14 2013 Intaver Institute 3 Project Cost Estimate in Billions A$ Date of cost estimate A three-train liquefied natural gas (LNG) facility on Barrow Island (Australia) that will produce 15.6 million metric tons of LNG per year.
  • 4. Corporate Portfolio Management Process 05/07/14 2013 Intaver Institute 4 Project Cost and Schedule risks and uncertainties Geological and other Uncertainties affecting production Price Uncertainties Other Risks and Uncertainties: -Political risks -Uncertainties in Royalties regimes -…. Economic Analysis of the Projects Corporate Portfolio Management Strategic Decision Quantitative cost and schedule risk analysis is an important component of portfolio management
  • 5. Risk Management Affects Project Profitability 05/07/14 2013 Intaver Institute 5 Full circle cost of gas $/Mcf Quantitative risk analysis provides realistic risk adjusted and risk mitigated cost estimates
  • 6. Identifying and Managing Critical Risks is Key 05/07/14 2013 Intaver Institute 6 Risk Quantitative risk analysis identifies and prioritizes critical risks
  • 7. Which risks are critical? 05/07/14 2013 Intaver Institute 7 Risk 3Risk 3 Risk 4Risk 4 Risk 1Risk 1 Risk 5Risk 5 Risk 2Risk 2 Risk 1Risk 1 Risk 2Risk 2 Risk 3Risk 3 Risk 4Risk 4 Risk 5Risk 5 Schedule risk CostRisk SafetyRisk LegalRisk Quality Risk …………….. Risk Enviromen talRisk
  • 8. Tim e DependentCosts CostRisk Time is Money: Cost and Schedule Risks 05/07/14 2013 Intaver Institute 8 • Schedule risk drives Costs due to time dependent resource costs • 40% -70% cost risk is schedule driven Schedule risk
  • 9. Input 1: Project Schedule Input 2: List of Risks (Risk Register) Assign Risks to Project Tasks and Resources Perform Analysis Risk Events Approach
  • 10. Schedule 05/07/14 2013 Intaver Institute 10 Import project schedule from project management tool (Primavera, MS Project, etc..
  • 11. Costs 05/07/14 2013 Intaver Institute 11 Schedules can include cost data for quantitative risk analysis of fixed costs
  • 12. Resources 05/07/14 2013 Intaver Institute 12 Resources with rates are loaded with the project schedule to allow for risk analysis of time dependent costs
  • 13. Risk Register 05/07/14 2013 Intaver Institute 13 Project risk register is integrated to the project schedule and cost
  • 14. Risk Assignment 05/07/14 2013 Intaver Institute 14 Task R1 R2 R3 R4 R5 R6 Installing Microsoft Seismic monitoring x x Deliver frac fleet and install equipment x Deliver rig and equipment x Well 1,2,3 (share common risks) x Rig Mobilization x Drilling x x x x Installing Service Rig x Completion (8 stages fracing) x x Risks are assigned to project activities
  • 15. Risk Assignment Interface 05/07/14 2013 Intaver Institute 15 30 % chance that risk causes a delay and increase in cost of drilling Risk Assigned to task ‘Drilling’ Risk probability and cost and schedule impact are assigned to activities
  • 16. Run Monte Carlo Simulation 05/07/14 2013 Intaver Institute 16 Monte Carlo simulation prioritizes risk based on impact on cost, schedule or other parameters
  • 17. Results of Analysis 05/07/14 2013 Intaver Institute 17 Monte Carlo simulation results for cost and schedule can be viewed as histograms or cumulative probability
  • 18. Risk Adjusted Project Schedule 05/07/14 2013 Intaver Institute 18 Schedule with risks Schedule without risks Arrows show risk assignments
  • 19. Project Cost 05/07/14 2013 Intaver Institute 19 Schedule with risks Schedule without risks Results of quantitative cost risk analysis are shown on the Cost view
  • 20. Risk Planning – Mitigation Plan 05/07/14 2013 Intaver Institute 20 Risk response plans can be plotted on a Risk Mitigation Waterfall chart
  • 21. Pre and Post Mitigation Risk Scores 05/07/14 2013 Intaver Institute 21 Pre- mitigation Post- mitigation
  • 22. Risk Planning Risk: Mechanical Problem with instrument 05/07/14 2013 Intaver Institute 22 Post Mitigation $16, 734, 906Pre-Mitigation Cost 17, 178, 397 Risk response plans can reduce the expected cost of the project
  • 23. RiskyProject Enterprise 05/07/14 2013 Intaver Institute 23 Enterprise Risk Database: Schedules, Risks, Mitigation Plans RiskyProject Professional RiskyProject Lite RiskyProject Web
  • 24. Future Reading • Virine, L. and M. Trumper. 2007 Project Decisions: The Art and Science. VA: Management Concepts • Virine, L. and M. Trumper. 2013. Project Think: Why Good Managers Make Poor Project Choices. England: Gower Publishing • P. Leach. 2005. Late and Over Budget: Why Projects Always Seem to Take Longer and Cost More Than Planned. Projects & Profits, Vol. V Issue - XI, November 2005 • http://www.project decisions.org • http://www.intaver.com/index-whitepapers.html • http://www.risk-doctor.com/ • http://www.projectrisk.com Contact Michael Trumper mtrumper@intaver.com 403.692.2252 Intaver Institute Inc. www.intaver.com 05/07/14 2013 Intaver Institute 24