Working togetherfor a safer world
Why risk management services are vital to the oil and gas industry
Lloyd’s Register Energy
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 andpreparation reduce risks to acceptable levels?
Lloyd’s Register Energy
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
Determining acceptable levels of risk for your business
Companies need to pay attention to risks and have robust processes in place
Business risks
Identifying
Assessing
Correctlyevaluating
Examinecost
ConsiderRegulatory
regimes
Decide how far to go with protective and mitigating
measuresReduce risk
Manage risk
Recognise opportunities
Lloyd’s Register Energy
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
Tools Skills
Knowledge
Lloyd’s Register Energy
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
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
A wealth of experience gained through worldwide projects
Lloyd’s Register Energy
Explaining and modelling risk management
The Australian standard 436:2004 offers an easy-to-follow model which Lloyd’s Register endorses
Establish the context
Identify risks
Analyse risks
Evaluate risks
Co
mm
un
icat
e an
d c
on
sult
Mo
nit
or
and
rev
iew
Treat risks
Ris
k as
sess
men
t
Risk management guideline
AS/NZS 436:2004
Lloyd’s Register Energy
The advantages of implementing the Australianstandard 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
MonitoringMeasurement of outcomes
Communication with all Parties is vital
Lloyd’s Register Energy
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
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
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
Human factors
Organisation
Technology
Lloyd’s Register Energy
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 efficiency of operations
•Reduce costs
•Streamline processes for all aspects of the business
•Ensure compliance with regulations
•Increase efficiency of operations
•Increase safety of personnel and plant
Reduce the likelihood of Murphy’s Law…
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.
For more information please visit:www.lr.org/Energy
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Working togetherfor a safer world