Case analysis

on
minimizing and mitigation risk
in Oil and Petroleum companies
Submitted by:Alok bardiya P91011
Shekhar Choudhary P91025
Swaraj Dhayagude P91032

Introduction
Global energy security risks
Operational risk
Risk posed by measures to mitigate
Greenhouse Gases
Risk posed by peaking of world conventional
oil production
Supply chain managing and mitigation

Global energy security risks

Causes of risk
steep rise in oil import demand in
developed and most importantly developing
countries
Narrowing margins between supply and
demand which has driven up prices

Mitigation measures
Promoting investment in energy sector
Removing barriers to trade and investment
for both private sector and public companies
Encouraging mutual self interest of energy
producers and consumers to secure long term
and committed demand for hydrocarbons
Seeking the convergence of norms, standards
and practices as well as new forms of
cooperation to facilitate the financing of
resource developments

Operational risk
IT can help mitigate operational risks.
Organizations that understand their risk profile
and take concrete measures to mitigate risks
will be better positioned to be successful in
market place.
Consider deploying a corporate wide
approach to managing information in the
plant. The best practice is to use technology to
support operation.

Risk posed by measures to mitigate

GHG
Operating enviornment of oil industry is always
complex
The challenge is to reduce GHG emission in oil
operations

Investment risk
Uncertainty of how GHG regulations on carbon
emission constraints will effect oil demands and
oil prices over the next 20 years.
Managing financial risks
Analyze different GHG scenarios for upcoming
fiscal and regulatory regimes and determine
how companies should direct investments to
ensure future returns.

Possible steps forward

Transfer GHG reducing technologies especially to
countries that have large reserves of oil and gas in
order to give them an opportunity to monetize
these resources at reduced cost and reduced
pollution levels.

Risk by peaking of world oil

production
Oil peaking could cost the U.S. economy dearly
because it is fundamentally dependent on lowcost abundant oil.
Oil peaking will be abrupt and revolutionary and
will present a unique challenge.
The liquid fuel will be a problem.

Matter of risk management

Mitigation efforts initiated earlier than required
may turn out to be premature, if peaking is long
delayed.
On the other hand, if peaking is imminent, failure
to initiate timely mitigation could be extremely
damaging.
Prudent risk management requires the planning of
mitigation well before peaking. Early mitigation will
certainly be less expensive and less damaging to
the worlds economiesthan delayed mitigation.

Supply chain managing and

mitigation
The study suggested that the preferred method of
mitigating the supply-chain risk is to internalize and
manage the risks rather than pass on to the third
party or insurers.
Some of these risks may simply be monitored or
managed as part of daily management routine
while some may be combined since they address
the same underlying issues, or may be managed at
different organizational level.

Conclusion
Effective risk management increases the value from
business decisions, because conscious choice are
made in relation to risks that have an impact on, or
result from these business decisions. The objective
of risk management is not, therefore arbitrarily to
reduce or eliminate risk. In general many people
are involved in managing risk and risk management
is an integral part of the groups management
activities (strategy, planning, execution, operation,
monitoring and appraisal); it is not a separate
activity.

References
Reducing risk in oil and gas operations by; Roberta
Bigliani May 2013.
International Journal of Business and Economics
Perspectives Volume 7, Number 1, Spring 2012
Peaking of world oil production:
impacts, mitigation, & risk management; Robert L.
Hirsch, February 2005.
IndustryRisks posed by measures to mitigate
greenhouse gases; Gabriel Sanchez- Sierra, Nov
2005.

Energy security risks and risk mitigation:

an overview; George Kowalski and Sead Vilogorac;
2008