Risk Management Case Study – Oil & Gas Industry
Rapid expansion of its oil sands operations was causing one of the world’s largest integrated oil and gas companies significant challenges with its risk management systems and practices. The Project Integration Manager of the company sought Kaiser’s assistance to enhance its existing systems in this area. The key challenge for the client was to determine whether best-in-class risk management practices could be identified and adopted to strengthen the company’s existing practices while also increasing overall efficiency and effectiveness.
Kaiser’s Approach – Benchmarking Best-in-Class Risk Management Systems:
Kaiser Associates recommended an internal assessment coupled with an in-depth benchmark analysis of four out-of-industry companies and one competitor. This mix of companies allowed for broad evaluation of various risk management tools and practices across industries, while ensuring that findings would be grounded by the internal and competitor assessments. Kaiser developed a comprehensive methodology to identify the key components of each risk management system encompassing the processes, tools, and underlying culture driving risk awareness and the corresponding response in place. After completing case studies for each of the benchmark companies, Kaiser was able to assess these criteria for each. While Kaiser and its client expected to find some practices relevant across industries, both were surprised at the degree to which best-in-class findings were highly applicable to the oil sands context.
A significant number of immediately actionable opportunities for improvement to the client’s existing risk management systems were identified as the basis for a detailed action plan, e.g. senior staff were assigned risk management responsibility, cross-functional teams were created to manage major risks, and enhancements were made to risk tools and systems. In addition to enhancing the client’s oil sands operations, numerous opportunities to improve risk management in other operating segments have since been identified.