Why risk management services are vital to the oil and gas industry


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Can due diligence cancel Murphy's Law? This presentation looks at how preparation and foresight can reduce risks to acceptable levels

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Why risk management services are vital to the oil and gas industry

  1. 1. Why risk management services are vital to the oil and gas industry Working together for a safer world
  2. 2. Murphy’s Law • Alfred Holt, in his report to an engineering society in 1877, wrote, “it is found that anything that can go wrong at sea generally does go wrong sooner or later” • Lloyd’s Register, with its 250 year history of marine assurance, keenly appreciates the insight expressed by Murphy’s Law • We need to ask....is it always and necessarily true? Can diligence sometimes cancel Murphy’s Law and preparation reduce risks to acceptable levels? Lloyd’s Register Energy
  3. 3. Different kinds of risks There are many different kinds of risks Economic Safety Technical Health Environmental • We know how to avoid many types of risk and yet things still go wrong • Very few organisations have the knowledge, skills and tools to navigate the risk assessment process successfully and come up with the optimal risk management solutions Lloyd’s Register Energy
  4. 4. Determining acceptable levels of risk for your business Companies need to pay attention to risks and have robust processes in place Decide how far to go with protective and mitigating measures Identifying Business risks Assessing Correctly evaluating Lloyd’s Register Energy Examine cost Consider Regulatory regimes Reduce risk Manage risk Recognise opportunities
  5. 5. Does your company have what it takes? Very few organizations have the requisite capabilities to navigate the risk assessment process successfully and come up with the optimal risk management solutions Knowledge Tools Lloyd’s Register Energy Skills
  6. 6. How can Lloyd’s Register help? • Provide a precise framework for identifying and assessing risk • Determine optimal management strategy • Guide companies through the whole process of establishing and implementing a robust and efficient risk management system • Lloyd’s Register’s offers: Continuously developed state of the art methodology A wealth of experience gained through worldwide projects Knowledge of a vast number of areas: oil & gas, power, chemical, transportation and more Particular expertise through experience in the North Sea, since much of the development of advanced risk management tools have their origin there Lloyd’s Register Energy
  7. 7. Explaining and modelling risk management The Australian standard 436:2004 offers an easy-to-follow model which Lloyd’s Register endorses Analyse risks Evaluate risks Monitor and review Identify risks Risk assessment Communicate and consult Establish the context Risk management guideline Treat risks Lloyd’s Register Energy AS/NZS 436:2004
  8. 8. The advantages of implementing the Australian standard risk management model • Allows a systematic and flexible approach to risk • Risk assessments can be done both qualitatively and quantitatively • May be applied system-wide or on a subsystem basis • Projects, changes in organisation and implementation of procedures can be risk assessed Communication with all Parties is vital Monitoring Lloyd’s Register Energy Measurement of outcomes
  9. 9. Risk management: an iterative process • In parallel with the risk assessment and the follow-up, there must be both communication with the involved parties and monitoring of the outcomes of the different steps • Risk management is an iterative process and there will always be room for improvements Lloyd’s Register Energy
  10. 10. Key areas of risk managment Lloyd’s Register recommends adopting a holistic approach in handling the treatment of risk as different areas and issues within companies are always interrelated It is vital to anticipate how change in one area will impact risk factors in the other two Technology Human factors Organisation Lloyd’s Register is uniquely placed to assist with drawing these areas together since it has deep competence within each one; ensuring a company’s risk management process involves not only the technical aspects, but also the organisational and human elements Lloyd’s Register Energy
  11. 11. Benefits of effective risk management Undertaking a risk management process provides a clear and holistic view of the company, allowing opportunities to be readily identified in a wide range of areas: •Increase •Reduce efficiency of operations costs •Streamline •Ensure processes for all aspects of the business compliance with regulations •Increase efficiency of operations •Increase safety of personnel and plant Reduce the likelihood of Murphy’s Law… Lloyd’s Register Energy
  12. 12. For more information please visit: www.lr.org/Energy Follow us on LinkedIn Working together for a safer world Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates. Copyright © Lloyd’s Register [Entity]. 2013. A member of the Lloyd’s Register group.