Webinar: 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
Introduction
• Intaver Institute Timeline Clients
– 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
Gorgon Natural Gas Project
A three-train liquefied natural gas (LNG) facility on Barrow Island
(Australia) that will produce 15.6 million metric tons of LNG per year.
Project Cost Estimate in Billions A$
50
45
40
35
30
25
20
15
10
5
0
2003 2007 March, 2009 September, September,
2009 2011, First
Phase
Date of cost estimate
Project Risk Analysis in Portfolio Management
Process
Project Cost and
Schedule risks and
uncertainties
Geological and other
Uncertainties affecting
production Economic Corporate
Strategic
Analysis of the Portfolio
Decision
Projects Management
Price Uncertainties
Other Risks and
Uncertainties:
- Political risks
- Uncertainties in
Royalties regimes
- ….
Risk Management Affects Project Profitability
Full circle cost of gas
$/Mcf
Gas Price
4
Other costs:
3.5 OpCost,
Royalties,
3
Return, G&A,
2.5 etc.
2
Other costs:
1.5 OpCost,
Royalties,
1
Return, G&A,
0.5 etc.
0
Without risks With risks With risks and
mitigations
Identifying and Managing Critical Risks is Key
Risk
Which risks are critical?
Risk 1 Risk 3
Risk 2 Risk 4
Risk 3 Risk 1
Risk 4 Risk 5
Risk 5 Risk 2
Safety Risk
Enviromen
Legal Risk
……………..
Schedule
Cost Risk
Quality
tal Risk
Risk
Risk
risk
Time is Money: Cost and Schedule Risks
• Schedule risk drives
Costs due to time
dependent resource
costs
• 40% -70% cost risk is
Cost Risk
Schedule
schedule driven
risk
1/31/2018 2013 Intaver Institute 8
Risk Events Approach
Input 1: Project Schedule
Perform
Analysis
Assign Risks to Project Tasks and
Resources
Input 2: List of Risks (Risk Register)
Schedule
Costs
Resources
Risk Register
Risk Assignment
Task R1 R2 R3 R4 R5 R6
Installing Microsoft Seismic x x
monitoring
Deliver frac fleet and install x
equipment
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
Risk Assignment Interface
30 % chance that risk causes a
delay and increase in cost of
drilling
Risk Assigned to task ‘Drilling’
Run Monte Carlo Simulation
Results of Analysis
Risk Adjusted Project Schedule
Schedule with risks
Schedule without risks
Arrows show risk
assignments
Project Cost
Schedule without
risks
Schedule with risks
Risk Planning – Mitigation Plan
Pre and Post Mitigation
Pre- Post-
mitigation mitigation
Risk Planning
Risk: Mechanical Problem with instrument
Pre-Mitigation Cost 17, 178, 397 Post Mitigation $16, 734, 906
RiskyProject Enterprise
RiskyProject Professional
Enterprise Risk
RiskyProject Lite
Database:
Schedules,
Risks,
Mitigation Plans RiskyProject Web
Future Reading
Project Think: Project Decisions: The Project Risk Analysis
Why Good Art and Science Made Ridiculously
Managers Make Introduction to Simple
Poor Project Project Risk
Choices Management and
Decision Analysis
24
Future Reading
• 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
[email protected]
403.692.2252
Intaver Institute Inc.
www.intaver.com
