APM Risk SIG Conference 2019

1. Where is the risk?
Simon White
APM Risk SIG Conference 2019
Using risk to influence the future
26th March, Birmingham

2. Agenda
• Introduction
– Risk analysis
– Inputs
– Outputs
• Visualising risk
– Inputs
– Outputs
• Quiz

3. Introduction

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

8. Inputs

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

11. Risk assessments

12. Risk assessments

13. Risk assessments

14. Input shapes
Single value 1-point estimate
More knowledge /
less uncertainty
Beta Pert
(larger shape parameter,
default shape parameter of 4)
3-point estimate
Triangle / Trigen 3-point estimate
Beta Pert
(smaller shape parameter)
3-point estimate
Uniform 2-point estimate
Less knowledge /
more uncertainty
Credit: from Centrica Energy’s QRA training manual

15. Interface map
Credit: from Spirit Energy’s PACE guidelines

16. Logic

17. Risk-based relationships
10-Apr-18
30-May-18
19-Jul-18
07-Sep-18
27-Oct-18
16-Dec-18
04-Feb-19
26-Mar-19
15-May-19
10-Apr-18
30-May-18
19-Jul-18
07-Sep-18
27-Oct-18
16-Dec-18
Saildatechosenbypolicy
Hypothetical ready to sail
0
10
20
30
40
50
10-Apr-18
30-May-18
19-Jul-18
07-Sep-18
27-Oct-18
16-Dec-18
Numberofdaysincompleteonshore
Hypothetical ready to sail
0
50
100
150
200
250
10-Apr-18
30-May-18
19-Jul-18
07-Sep-18
27-Oct-18
16-Dec-18
Numberofoffshoredaystocompletethe
carryoverwork
Hypothetical ready to sail
June 2018 installation
August 2018 installation
April 2019 installation
June 2018
installation
August 2018
installation
April 2019
installation
Ready to sail
Ready to sail Ready to sail
June 2018
installation
August 2018
installation
April 2019
installation

18. Step through analysis

19. Correlation strength
No correlation Some correlation Full correlation

20. Outputs

21. Distribution

22. Distribution
Credit: from Spirit Energy’s PACE guidelines
Outcome

23. Contingency
Credit: from Spirit Energy’s PACE guidelines

24. Risked Gantt

25. Compare distributions

26. Compare distributions
Option 1 – first gas Option 2 – first gas

27. Compare distributions
Option 1 – first gas Option 2 – first gas

28. Compare distributions

29. Drivers

30. Drivers

31. Key results summary
Cost
(NK m)
Onshore
completion
Start
commissioning First oil
Base (to spend, 1,495.2 16-Apr-20 02-Jun-21 03-Sep-21
exc. contingency) (increase on base:)
P10 1,593.9 98.7 6.6% of base 16-Apr-20 02-Jun-21 02-Sep-21
P50 1,692.4 197.2 13.2% of base 16-Apr-20 16-Jul-21 02-Nov-21
P90 1,819.1 323.9 21.7% of base 25-Apr-20 27-Oct-21 28-Feb-22

32. Contingency, distribution and drivers

33. Explain shapes

34. Explain shapes
Installation misses
two seasons
(unlikely)
Installation misses
a season

35. Explain shapes

36. Polarity of percentiles
• P0 is best case; P100 is worst case

37. Phasing

38. Drill into risk
• Cost breakdown

39. Drill into risk
• Cost breakdown

40. Drill into risk
• Installation cost

41. Drill into risk
• Installation cost

42. Drill into risk
• Offshore productivity risk

43. Drill into risk
• Offshore productivity risk

44. Quiz

45. Shape 1 – long thin tail

46. Shape 2 – distinct gap, with spike

47. Shape 3 – distinct gap

48. Shape 4 – non-distinct gap

49. Shape 5 – dip

50. Shape 6 – cut off

51. Shape 7 – only one column

52. Shape 8 – multiple gaps

53. Shape 9 – staircase

54. Shape 10 – right-angled triangle

55. White Box by BOLD

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