DNV survey reveals: Enterprise risks on the UK Continental Shelf

The latest market situation is leading to difficulties for some energy companies while creating great opportunities for others. To understand how the major UK operators are dealing with these risks at an enterprise level, DNV has conducted a survey among these companies’ executives.

ページをプリント PDFとして保存
Hari Vamadevan, DNV Energy’s Director of Operations in Europe. Photo: DNV/Nina E. Rangøy

Hari Vamadevan, who is DNV Energy’s Director of Operations in Europe, explains that senior executives at MD, CFO and COO level in many of the top 20 UK Continental Shelf operators were interviewed to discover the new challenges.

“They raised two main issues. Firstly, there is a general shortage of qualified personnel and, secondly, the asset integrity of the ageing UK Continental Shelf infrastructure is a challenge. Both issues are being actively addressed. The operators accept the benefits of an Enterprise Risk Management approach, but express frustration with the practicalities of its implementation, which lead to the incomplete realisation of its full ability to improve business performance,” says Mr Vamadevan.

He adds that “despite the constant shifts in the business environment, DNV believes it is possible to enhance business performance through proper management of the business risks.”

日付: 23 October 2009

Author:

Summary of the UK Enterprise Risk Management (ERM) survey

Industry issues
Ageing Infrastructure and Asset Integrity - Rather than occupational safety risks, the focus has moved to Process Safety and Asset Integrity due to the UKCS’ ageing infrastructure. The challenge is to safely preserve this infrastructure in order to exploit the new exploration finds.

  • Supply chain costs and lifting costs - The current high cost base is critical, driven by resource shortages of all types (people, equipment, etc.).

  • Project Risk Management (PRM) - Vital in a low oil price/high cost world to deliver projects on time, on budget and in line with performance expectations.

  • Resources (quality; availability; ageing workforce) - The resource issue was most commonly stated by all participants, suggesting a broad shortage in the near and long term. The challenge is to secure access to the right resources and to retain the resource base, avoiding the inefficient ebb and flow of experienced personnel from and to the workforce.

  • Oil Price - This ‘risk’ is outside a company’s control and is often considered in a different ‘uncertainty’ category. The challenge in a fluctuating market is how to evaluate the opportunities effectively, given the long project lead times.

ERM adoption
ERM is a useful contribution to the management of the business, and all respondents apply an ERM approach to identify and manage their risks, though their approach focuses on threats.

ERM drivers
The main driver for implementing ERM is ‘to meet stakeholder requirements’. This demonstrates the perceived benefit of meeting the demands of corporate HQs to identify and manage risks. Other drivers are ‘to help meet strategic goals’ and ‘to improve decision making’.

ERM application
ERM has been adopted to a varying degree. Significant identification and analysis of risks occur, but the implementation methods vary significantly. This may contribute to frustrations with the process and the incomplete implementation or realisation of its full benefits.

Finally, with limited auditing and no bench-marking of ERM taking place, it is uncertain whether there is sufficient governance of the process. This suggests that training programmes are required.

>>