Working togetherfor a safer world

Why risk management services are vital to the oil and gas industry

Lloyd’s Register Energy

Murphy’s Law

• Alfred Holt, in his report to an engineering society in 1877, wrote, “it is found that anything that can go wrong at sea generally does go wrong sooner or later”

• Lloyd’s Register, with its 250 year history of marine assurance, keenly appreciates the insight expressed by Murphy’s Law

• We need to ask....is it always and necessarily true?

Can diligence sometimes cancel Murphy’s Law andpreparation reduce risks to acceptable levels?

Lloyd’s Register Energy

Different kinds of risks

There are many different kinds of risks

Economic Safety Technical Health Environmental

• We know how to avoid many types of risk and yet things still go wrong

• Very few organisations have the knowledge, skills and tools to navigate the risk assessment process successfully and come up with the optimal risk management solutions

Lloyd’s Register Energy

Determining acceptable levels of risk for your business

Companies need to pay attention to risks and have robust processes in place

Business risks

Identifying

Assessing

Correctlyevaluating

Examinecost

ConsiderRegulatory

regimes

Decide how far to go with protective and mitigating

measuresReduce risk

Manage risk

Recognise opportunities

Lloyd’s Register Energy

Does your company have what it takes?

Very few organizations have the requisite capabilities to navigate the risk assessment process successfully and come up with the optimal risk management solutions

Tools Skills

Knowledge

Lloyd’s Register Energy

How can Lloyd’s Register help?

• Provide a precise framework for identifying and assessing risk

• Determine optimal management strategy

• Guide companies through the whole process of establishing and implementing a robust and efficient risk management system

• Lloyd’s Register’s offers:

Continuously developed state of the art methodology

Knowledge of a vast number of areas: oil & gas, power, chemical, transportation and more

Particular expertise through experience in the North Sea, since much of the development of advanced risk management tools have their origin there

A wealth of experience gained through worldwide projects

Lloyd’s Register Energy

Explaining and modelling risk management

The Australian standard 436:2004 offers an easy-to-follow model which Lloyd’s Register endorses

Establish the context

Identify risks

Analyse risks

Evaluate risks

Co

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sult

Mo

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and

rev

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Treat risks

Ris

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Risk management guideline

AS/NZS 436:2004

Lloyd’s Register Energy

The advantages of implementing the Australianstandard risk management model

• Allows a systematic and flexible approach to risk

• Risk assessments can be done both qualitatively and quantitatively

• May be applied system-wide or on a subsystem basis

• Projects, changes in organisation and implementation of procedures can be risk assessed

MonitoringMeasurement of outcomes

Communication with all Parties is vital

Lloyd’s Register Energy

Risk management: an iterative process

• In parallel with the risk assessment and the follow-up, there must be both communication with the involved parties and monitoring of the outcomes of the different steps

• Risk management is an iterative process and there will always be room for improvements

Lloyd’s Register Energy

Key areas of risk managment

Lloyd’s Register recommends adopting a holistic approach in handling the treatment of risk as different areas and issues within companies are always interrelated

It is vital to anticipate how change in one area will impact risk factors in the other two

Lloyd’s Register is uniquely placed to assist with drawing these areas together since it has deep competence within each one; ensuring a company’s risk management process involves not only the technical aspects, but also the organisational and human elements

Human factors

Organisation

Technology

Lloyd’s Register Energy

Benefits of effective risk management

Undertaking a risk management process provides a clear and holistic view of the company, allowing opportunities to be readily identified in a wide range of areas:

•Increase efficiency of operations

•Reduce costs

•Streamline processes for all aspects of the business

•Ensure compliance with regulations

•Increase efficiency of operations

•Increase safety of personnel and plant

Reduce the likelihood of Murphy’s Law…

Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates.Copyright © Lloyd’s Register [Entity]. 2013. A member of the Lloyd’s Register group.

For more information please visit:www.lr.org/Energy

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