4. Risk assessment
• Two popular ways of expressing risk:
1. Probability and impact (risk register)
2. Three-point estimate
VH
Major
scope
change
H
DECC
requires
recycle
M
Delay to
lift vessel
arrival
L
SIMOPS
issues
L M H VH
Probability
Impact
5. Quantitative risk analysis
• The risk model shows the effect of the risk assessment,
on the overall project
Base
estimate
(MMUSD)
Bulks 2.3
Fabrication 5.7
Transportation 1.9
Heavy lift vessel 1.6
Hook-up and
commissioning
4.3
Project services 0.6
Total 16.4
The P90 is a
"reasonably likely"
worst case.
Contingency at P90 = 6.6
6. Quantitative risk analysis
Base
(MMUSD)
Bulks 2.3
Fabrication 5.7
Transportation 1.9
Heavy lift vessel 1.6
Hook-up and
commissioning
4.3
Project services 0.6
Total 16.4
- % + %
Base
- % + %
Base
P10
P50
P90
Base
Mitigate
X
Base
(MMUSD)
Bulks 2.3
Fabrication 5.7
Transportation 1.9
Heavy lift vessel 1.6
Hook-up and
commissioning
4.3
Project services 0.6
Total 16.4
- % + %
Base
- % + %
Base
P10
P50
P90
Base
Mitigate
X
Base
(MMUSD)
Bulks 2.3
Fabrication 5.7
Transportation 1.9
Heavy lift vessel 1.6
Hook-up and
commissioning
4.3
Project services 0.6
Total 16.4
- % + %
Base
- % + %
Base
Mitigate
7. Quantitative risk analysis
• Never been done before
• Challenging conditions
• Uncertain regulations
• Early phase
• Been done before
• Easy conditions
• Established regulations
• Mid-execution
P10
P50
P90
Base
P10
P50
P90
Base
• “Cheaper but
more risky”
• “More expensive,
less risky”
X
X
9. Risk events and variance
• Two popular ways of expressing risk:
1. Probability and impact (risk events)
2. Three-point estimate (variance or uncertainty)
VH
Major
scope
change
H
DECC
requires
recycle
M
Delay to
lift vessel
arrival
L
SIMOPS
issues
L M H VH
Probability
Impact
Probability Impact Score
Major scope change M VH 25
SIMOPS issues H L 17
DECC requires recycle L H 15
Delay to lift vessel arrival L M 9
… …
10. Risk events
• May or may not happen (probability)
• Deviation from base, if it happens (impact)
Impact
Probability
Impact
Probability
56. About Simon White
• Over 20 years’ experience in risk management and risk analysis
– Wide variety of industries and major projects
– Three years as UK Risk Analyst for ConocoPhillips
– Previously Senior Risk Management Consultant and trainer for Pertmaster,
Primavera and Oracle
– Risk analyst for current major oil / gas projects such as Cygnus, Clair Ridge and
Jasmine, and a major government infrastructure programme
• Recognised as one of the leading practitioners of integrated project schedule
and cost risk management and analysis
– Methods allow project risk models to be interrogated and understood by project
teams and senior management
– Designed and built commercial risk software: Predict!, Arrisca, and a contributing
architect to Primavera Risk Analysis (Pertmaster)
– Develops tools for more practical and valuable project and business risk
management.
• Try out White Box at www.whiteboxrisk.com