Horse Hill Project Risk Essay
Introduction
Oil and gas exploration is known to be highly risky and cost-intensive projects that require capital investments decisions that are evaluated all the way from initiation of upstream explorations through midstream and downstream activities (Inkpen and Moffett, 2011). Risks in a project is an uncertain occurrence that can have a negative or positive impact (i.e. opportunities and threats) on ‘project objectives.’ Risks in a project also include proactive management of all stakeholder’s involved that can have an impact on these goals, positively or negatively (PMBOK® Guide, 2013).
Risk Factors and Risk Appraisals for the Horse Hill Project
Risk management in regards to decision making in the oil industry is conceptually difficult decisions that management faces because their characteristics are different in most cases (Walls, Morahan and Dyer, 1995).
Organisations distinguish risks as a consequence of uncertainty in …show more content…
However, their best case and optimistic estimation are 100 mmbbl of oil and 15%, or 15 mmbbl of oil is recoverable and will have a tremendous impact on the UK’s economy (Moylan, 2015).
The components of risk factors in the Horse Hill development projects is:
• Stakeholder’s involvements and ownership structure in HHD Ltd., including its equity and debt partners – High impact.
• Exploration, i.e. reservoir may be smaller than anticipated, quality of oil and well characteristics – High Impact (Suslick and Schiozer, 2004).
• Infrastructure, i.e. planning, schedule, EPCI constructions for drilling site, pipeline, refinery and choice of technologies – High Impact (Suslick and Schiozer, 2004).
• Environmental, i.e. drilling, pipelines and refineries can cause harm to groundwater, soils, surface, air pollution, vegetation and wildlife’s – High impact (Van Hinte, Gunton and Day,
Oil and gas exploration is known to be highly risky and cost-intensive projects that require capital investments decisions that are evaluated all the way from initiation of upstream explorations through midstream and downstream activities (Inkpen and Moffett, 2011). Risks in a project is an uncertain occurrence that can have a negative or positive impact (i.e. opportunities and threats) on ‘project objectives.’ Risks in a project also include proactive management of all stakeholder’s involved that can have an impact on these goals, positively or negatively (PMBOK® Guide, 2013).
Risk Factors and Risk Appraisals for the Horse Hill Project
Risk management in regards to decision making in the oil industry is conceptually difficult decisions that management faces because their characteristics are different in most cases (Walls, Morahan and Dyer, 1995).
Organisations distinguish risks as a consequence of uncertainty in …show more content…
However, their best case and optimistic estimation are 100 mmbbl of oil and 15%, or 15 mmbbl of oil is recoverable and will have a tremendous impact on the UK’s economy (Moylan, 2015).
The components of risk factors in the Horse Hill development projects is:
• Stakeholder’s involvements and ownership structure in HHD Ltd., including its equity and debt partners – High impact.
• Exploration, i.e. reservoir may be smaller than anticipated, quality of oil and well characteristics – High Impact (Suslick and Schiozer, 2004).
• Infrastructure, i.e. planning, schedule, EPCI constructions for drilling site, pipeline, refinery and choice of technologies – High Impact (Suslick and Schiozer, 2004).
• Environmental, i.e. drilling, pipelines and refineries can cause harm to groundwater, soils, surface, air pollution, vegetation and wildlife’s – High impact (Van Hinte, Gunton and Day,