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How to use RiskyProject software for project risk management and risk analysis in oil and gas industry. For more information how to perform schedule risk analysis using RiskyProject software please visit Intaver Institute web site: http://www.intaver.com. About Intaver Institute. Intaver Institute Inc. develops project risk management and project risk analysis software. Intaver's flagship product is RiskyProject: project risk management software. RiskyProject integrates with Microsoft Project, Oracle Primavera, other project management software or can run standalone. RiskyProject comes in three configurations: RiskyProject Lite, RiskyProject Professional, and RiskyProject Enterprise.
Citation preview
How to Perform Project Risk Management for Oil
and Gas Projects
Intaver Institute Inc.303, 6707, Elbow Drive S.W, Calgary, AB, CanadaTel: +1(403)692-2252Fax: +1(403)459-4533www.intaver.com
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
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Clients
Gorgon Natural Gas Project
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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.
Corporate Portfolio Management Process
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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
Quantitative cost and schedule risk analysis is an important component of portfolio management
Risk Management Affects Project Profitability
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Full circle cost of gas$/Mcf
Quantitative risk analysis provides realistic risk adjusted and risk mitigated cost estimates
Identifying and Managing Critical Risks is Key
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Risk
Quantitative risk analysis identifies and prioritizes critical risks
Which risks are critical?
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Risk 3Risk 3
Risk 4Risk 4
Risk 1Risk 1
Risk 5Risk 5
Risk 2Risk 2
Risk 1Risk 1
Risk 2Risk 2
Risk 3Risk 3
Risk 4Risk 4
Risk 5Risk 5
Sche
dule
ris
k
Cost
Ris
k
Safe
ty R
isk
Lega
l Ris
k
Qua
lity
Risk
……
……
…..
Risk
Envi
rom
enta
l Ris
k
Time Dependent C
osts
Cost
Ris
k
Time is Money: Cost and Schedule Risks
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• Schedule risk drives Costs due to time dependent resource costs
• 40% -70% cost risk is schedule driven
Sche
dule
ris
k
Input 1: Project Schedule
Input 2: List of Risks (Risk Register)
Assign Risks to Project Tasks and Resources
Perform Analysis
Risk Events Approach
Schedule
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Import project schedule from project management tool (Primavera, MS Project, etc..
Costs
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Schedules can include cost data for quantitative risk analysis of fixed costs
Resources
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Resources with rates are loaded with the project schedule to allow for risk analysis of time dependent costs
Risk Register
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Project risk register is integrated to the project schedule and cost
Risk Assignment
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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
Risks are assigned to project activities
Risk Assignment Interface
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30 % chance that risk causes a delay and
increase in cost of drillingRisk Assigned to task
‘Drilling’
Risk probability and cost and schedule impact are assigned to activities
Run Monte Carlo Simulation
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Monte Carlo simulation prioritizes risk based on impact on cost, schedule or other parameters
Results of Analysis
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Monte Carlo simulation results for cost and schedule can be viewed as histograms or cumulative probability
Risk Adjusted Project Schedule
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Schedule with risks
Schedule without risks
Arrows show risk assignments
Project Cost
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Schedule with risks
Schedule without risks
Results of quantitative cost risk analysis are shown on the Cost view
Risk Planning – Mitigation Plan
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Risk response plans can be plotted on a Risk Mitigation Waterfall chart
Pre and Post Mitigation Risk Scores
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Pre-mitigation
Post-mitigation
Risk Planning
Risk: Mechanical Problem with instrument
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Post Mitigation $16, 734, 906Pre-Mitigation Cost 17, 178, 397
Risk response plans can reduce the expected cost of the project
RiskyProject Enterprise
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Enterprise Risk Database:Schedules,
Risks,Mitigation Plans
RiskyProject Professional
RiskyProject Lite
RiskyProject Web
Future Reading
• Virine, L. and M. Trumper. 2007 Project Decisions: The Art and Science. VA: Management Concepts
• Virine, L. and M. Trumper. 2013. Project Think: Why Good Managers Make Poor Project Choices. England: Gower Publishing
• 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 [email protected] Institute Inc.www.intaver.com
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