1. How to Perform Project Risk Management for Oil and Gas Projects
Intaver Institute 2011
How to Perform Project Risk Management for Oil and Gas Projects 
Intaver Institute Inc.
303, 6707, Elbow Drive S.W, Calgary, AB, Canada
Tel: +1(403)
Fax: +1(403)

2. Introduction + Intaver Institute Timeline RiskyProject Clients
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
Clients
4/24/2017
2013 Intaver Institute

3. Gorgon Natural Gas Project
A three-train liquefied natural gas (LNG) facility on Barrow Island (Australia) that will produce 15.6 million metric tons of LNG per year.
Project Cost Estimate in Billions A$
Date of cost estimate
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2013 Intaver Institute

4. Corporate Portfolio Management Process
Project Cost and Schedule risks and uncertainties
Quantitative cost and schedule risk analysis is an important component of portfolio management
Geological and other Uncertainties affecting production
Economic Analysis of the Projects
Corporate Portfolio Management
Strategic Decision
Price Uncertainties
Other Risks and Uncertainties:
Political risks
Uncertainties in Royalties regimes ….
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2013 Intaver Institute

5. Risk Management Affects Project Profitability
Full circle cost of gas
$/Mcf
Quantitative risk analysis provides realistic risk adjusted and risk mitigated cost estimates
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2013 Intaver Institute

6. Identifying and Managing Critical Risks is Key
Quantitative risk analysis identifies and prioritizes critical risks
Opportunity?
Risk
Threat?
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2013 Intaver Institute

7. Which risks are critical?
Schedule risk
Cost Risk
Safety Risk
Legal Risk
Quality Risk
Enviromental Risk
…………….. Risk
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2013 Intaver Institute

8. Time is Money: Cost and Schedule Risks
Schedule risk drives Costs due to time dependent resource costs
40% -70% cost risk is schedule driven
Schedule risk
Cost Risk
Time Dependent Costs
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2013 Intaver Institute

9. Assign Risks to Project Tasks and Resources
Intaver Institute 2011
Risk Events Approach
Input 1: Project Schedule
Perform Analysis
Assign Risks to Project Tasks and Resources
Input 2: List of Risks (Risk Register)

10. Intaver Institute 2011
Schedule
Import project schedule from project management tool (Primavera, MS Project, etc..
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2013 Intaver Institute

11. Intaver Institute 2011
Costs
Schedules can include cost data for quantitative risk analysis of fixed costs
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2013 Intaver Institute

12. Intaver Institute 2011
Resources
To model schedule driven cost, we have included high level resources that have been assigned to specific tasks.
Resources with rates are loaded with the project schedule to allow for risk analysis of time dependent costs
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2013 Intaver Institute

13. Project risk register is integrated to the project schedule and cost
Intaver Institute 2011
Risk Register
Project risk register is integrated to the project schedule and cost
4/24/2017
2013 Intaver Institute

14. Risks are assigned to project activities
Intaver Institute 2011
Risk Assignment
Task R1 R2 R3 R4 R5 R6
Installing Microsoft Seismic monitoring x
Deliver frac fleet and install equipment
Deliver rig and equipment
Well 1,2,3 (share common risks)
Rig Mobilization
Drilling
Installing Service Rig
Completion (8 stages fracing)
Risks are assigned to project activities
4/24/2017
2013 Intaver Institute

15. Risk Assignment Interface
Intaver Institute 2011
Risk Assignment Interface
30 % chance that risk causes a delay and increase in cost of drilling
Risk Assigned to task ‘Drilling’
Risk probability and cost and schedule impact are assigned to activities
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2013 Intaver Institute

16. Run Monte Carlo Simulation
Intaver Institute 2011
Run Monte Carlo Simulation
Monte Carlo simulation prioritizes risk based on impact on cost, schedule or other parameters
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2013 Intaver Institute

17. Intaver Institute 2011
Results of Analysis
Monte Carlo simulation results for cost and schedule can be viewed as histograms or cumulative probability
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2013 Intaver Institute

18. Risk Adjusted Project Schedule
Intaver Institute 2011
Risk Adjusted Project Schedule
Schedule with risks
Schedule without risks
Arrows show risk assignments
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2013 Intaver Institute

19. Project Cost Schedule without risks Schedule with risks
Intaver Institute 2011
Project Cost
Schedule without risks
Schedule with risks
Results of quantitative cost risk analysis are shown on the Cost view
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2013 Intaver Institute

20. Risk Planning – Mitigation Plan
Intaver Institute 2011
Risk Planning – Mitigation Plan
Risk response plans can be plotted on a Risk Mitigation Waterfall chart
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2013 Intaver Institute

21. Pre and Post Mitigation Risk Scores
Intaver Institute 2011
Pre and Post Mitigation Risk Scores
Pre-mitigation
Post-mitigation
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2013 Intaver Institute

22. Risk Planning Risk: Mechanical Problem with instrument
Intaver Institute 2011
Risk Planning
Risk: Mechanical Problem with instrument
Pre-Mitigation Cost 17, 178, 397
Post Mitigation $16, 734, 906
Risk response plans can reduce the expected cost of the project
4/24/2017
2013 Intaver Institute

23. RiskyProject Enterprise
Intaver Institute 2011
RiskyProject Enterprise
Enterprise Risk Database:
Schedules,
Risks,
Mitigation Plans
RiskyProject Professional
RiskyProject Lite
RiskyProject Web
4/24/2017
2013 Intaver Institute

24. Contact Future Reading
Intaver Institute 2011
Future Reading
Virine, L. and M. Trumper Project Decisions: The Art and Science. VA: Management Concepts
Virine, L. and M. Trumper Project Think: Why Good Managers Make Poor Project Choices. England: Gower Publishing
P. Leach Late and Over Budget: Why Projects Always Seem to Take Longer and Cost More Than Planned. Projects & Profits, Vol. V Issue - XI, November 2005
decisions.org
Contact
Michael Trumper
Intaver Institute Inc.
4/24/2017
2013 Intaver Institute