Effect of Risk Management in Oil and Gas Industry

ABSTRACT Firms that operate in the oil and gas industry experience a number of risks in the supply chain of oil and gas and petrochemical as by products. These risks are inherently inculcated into the supply chain of oil and gas and related products ranging from the exploration, production, and marketing of oil, gas and related products. Quantitative and qualitative research will be conducted into the effects of these risks has revealed a strong relationship between the concepts of risk management and other risk management strategies on the product and service quality. Organizational executives use the concept of risk management (RM) techniques to design tailored RM strategies to integrate the concept into their enterprise risk†¦show more content†¦These risk components typically characterize the exploration, production, refining, and marketing of oil and gas and petrochemical products in the supply chain. This paper critically examines the types of risks which include environmental and financial risks, the theory of risk management and its relationship with reputational risk management (RRM), the concept of reputational risk which emphasizes on capital and people which are the most important assets of a company, and the fact which affirms that though people and capital can diminish, they can be recovered, but if reputation diminishes, it is near impossible to recover. BP is a typical case study where the concept of risk management is applied into an organization’s enterprise risk management framework. The research looks into the relationship between different types of risk management strategies and their integration into each other based on different risk management models to crystallize the relationship between these risks and their influence on product and service quality. However, the research concludes with an evaluation of the weaknesses of principles of RM in a practical environment targeting BP and possible solutions to the weaknesses applicable in BP’s risk management environment. METHODOLOGY In order to study the whole concept of risk management, the aim of the research was identified along with the main objective of theShow MoreRelatedOil and Gas Ohs1703 Words   |  7 PagesSAFETY AND HEALTH MANAGEMENT SYSTEM IN OIL AND GAS INDUSTRY Author : Subhrajit Bose Managing Partner / Lead Architect Sustainability – NextLink Solutions 3 2 1 Introduction: Safety and health management is one of the vital constituents of Oil and Gas industry activities because most of the operational conditions, chemicals and end products (hydrocarbons and other compounds) associated with Oil and Gas production are well known to pose serious safety and health threats to the workersRead MoreRisk Assessment And Action Plan1646 Words   |  7 Pages Energy Risk â€Æ' Energy Risk Being risk averse in an industry plagued with risk is a difficult task. However, identifying and managing risk is crucial in the capital intensive energy industry. 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