Risk management: Systematization in the context of oil and gas projects

Abstract

A number of risks are known to exist in various stages of the projects i.e. from the initial stage through the planning and finally at the implementation stage. This may be related to either subjective or objective reasons. Risk management and systematization plays an integral role in the assessment of the feasibility of the projects and further to make decisive investments. Identification and systematization of risks require regular updates for operational management throughout the project life-cycle. This paper introduces the importance of systematizing the risks in projects for optimal project outcomes, during the search, exploration and development in oil and gas projects. The essence of the design, national and international spheres of oil and gas projects, as well as the relationship between them is presented. We further systematized the risks on the basis of the decomposition of risk factors by the sphere of their occurrence. The occurrence of most of the risks were found to be mostly associated with geology, oil and gas reserves, production factors, trades, markets, the economy, finances, investment environment, and political mechanism. It was deduced that the systematization of risks is one of the effective management-components and an optimum solution to achieving the desired outcomes with less to zero risks in oil and gas and oil projects.