Oil and Gas Risk Analysis
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The document presents a webinar by Intaver Institute Inc. on risk management for oil and gas projects, detailing the development of their product 'RiskyProject' which includes various risk analysis tools. It emphasizes the importance of identifying and managing critical risks in project portfolio management and highlights the role of schedule risk in driving project costs. Key elements include project risk analysis methodologies, potential risks, and mitigation strategies to enhance project profitability.
Oil and Gas Risk Analysis
- 1. 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
- 2. Introduction • Intaver Institute Timeline – 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 Clients
- 3. 0 5 10 15 20 25 30 35 40 45 50 2003 2007 March, 2009 September, 2009 September, 2011, First Phase Gorgon Natural Gas Project Project Cost Estimate in Billions A$ Date of cost estimate A three-train liquefied natural gas (LNG) facility on Barrow Island (Australia) that will produce 15.6 million metric tons of LNG per year.
- 4. Project Risk Analysis in Portfolio Management Process Project Cost and Schedule risks and uncertainties Geological and other Uncertainties affecting production Price Uncertainties Other Risks and Uncertainties: - Political risks - Uncertainties in Royalties regimes - …. Economic Analysis of the Projects Corporate Portfolio Management Strategic Decision
- 5. Risk Management Affects Project Profitability 0 0.5 1 1.5 2 2.5 3 3.5 4 Without risks With risks With risks and mitigations Other costs: OpCost, Royalties, Return, G&A, etc. Other costs: OpCost, Royalties, Return, G&A, etc. Gas Price Full circle cost of gas $/Mcf
- 6. Identifying and Managing Critical Risks is Key Risk
- 7. Which risks are critical? Risk 3 Risk 4 Risk 1 Risk 5 Risk 2 Risk 1 Risk 2 Risk 3 Risk 4 Risk 5 Schedule risk CostRisk SafetyRisk LegalRisk Quality Risk …………….. Risk Enviromen talRisk
- 8. CostRisk Time is Money: Cost and Schedule Risks 1/31/2018 2013 Intaver Institute 8 • Schedule risk drives Costs due to time dependent resource costs • 40% -70% cost risk is schedule driven Schedule risk
- 9. Input 1: Project Schedule Input 2: List of Risks (Risk Register) Assign Risks to Project Tasks and Resources Perform Analysis Risk Events Approach
- 10. Schedule
- 11. Costs
- 12. Resources
- 13. Risk Register
- 14. Risk Assignment Task R1 R2 R3 R4 R5 R6 Installing Microsoft Seismic monitoring x x Deliver frac fleet and install equipment x 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
- 15. Risk Assignment Interface 30 % chance that risk causes a delay and increase in cost of drilling Risk Assigned to task ‘Drilling’
- 16. Run Monte Carlo Simulation
- 18. Risk Adjusted Project Schedule Schedule with risks Schedule without risks Arrows show risk assignments
- 19. Project Cost Schedule with risks Schedule without risks
- 20. Risk Planning – Mitigation Plan
- 21. Pre and Post Mitigation Pre- mitigation Post- mitigation
- 22. Risk Planning Risk: Mechanical Problem with instrument Post Mitigation $16, 734, 906Pre-Mitigation Cost 17, 178, 397
- 23. RiskyProject Enterprise Enterprise Risk Database: Schedules, Risks, Mitigation Plans RiskyProject Professional RiskyProject Lite RiskyProject Web
- 24. Future Reading 24 Project Think: Why Good Managers Make Poor Project Choices Project Decisions: The Art and Science Introduction to Project Risk Management and Decision Analysis Project Risk Analysis Made Ridiculously Simple
- 25. 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 mtrumper@intaver.com 403.692.2252 Intaver Institute Inc. www.intaver.com
Editor's Notes
- #13: To model schedule driven cost, we have included high level resources that have been assigned to specific tasks.