Can due diligence cancel Murphy's Law? This presentation looks at how preparation and foresight can reduce risks to acceptable levels

1. Why risk management services are vital to the oil and gas industry
Working together
for a safer world

2. 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 and
preparation reduce risks to acceptable levels?
Lloyd’s Register Energy

3. 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

4. Determining acceptable levels of risk for your business
Companies need to pay attention to risks and have robust processes in place
Decide how far to go with
protective and mitigating
measures
Identifying
Business
risks
Assessing
Correctly
evaluating
Lloyd’s Register Energy
Examine
cost
Consider
Regulatory
regimes
Reduce risk
Manage risk
Recognise
opportunities

5. 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
Knowledge
Tools
Lloyd’s Register Energy
Skills

6. 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
A wealth of experience gained through worldwide projects
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
Lloyd’s Register Energy

7. Explaining and modelling risk management
The Australian standard 436:2004 offers an easy-to-follow model which Lloyd’s Register endorses
Analyse risks
Evaluate risks
Monitor and review
Identify risks
Risk assessment
Communicate and consult
Establish the context
Risk management guideline
Treat risks
Lloyd’s Register Energy
AS/NZS 436:2004

8. The advantages of implementing the Australian
standard 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
Communication with all
Parties is vital
Monitoring
Lloyd’s Register Energy
Measurement
of outcomes

9. 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

10. 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
Technology
Human
factors
Organisation
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
Lloyd’s Register Energy

11. 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
•Reduce
efficiency of operations
costs
•Streamline
•Ensure
processes for all aspects of the business
compliance with regulations
•Increase
efficiency of operations
•Increase
safety of personnel and plant
Reduce the likelihood of Murphy’s Law…
Lloyd’s Register Energy

12. For more information please visit:
www.lr.org/Energy
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Working together
for a safer world
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.