Just about every business or industry is definitely prone to several risks that include floods, earthquake, terrorists that the industry should put mechanisms in place in order to avoid such. Successful contingency organizing has been worth addressing to most sectors that accept the idea. North Sea oil and Gas has for a long period been prone to the problem of changing weather conditions which can be especially skilled in the marine.
The companies that exploit the North Marine oil and gas possess put a whole lot of emphasis on risk management and a lot of the companies have build risk management departments (Leslie and Michaels, 1997).
Numerous deaths had occurred during the fermage of North Sea oil and gas in the 1970s and 1980s which called for successful contingency about to reduce the failures incurred by loosing staff and by some spillage of gas and oil due to buckles. The companies that exploit the gas and oil include invested in the contingency planning as a way of way of taking care of the risks (Leslie and Michaels, 1997).
North Sea coal and oil has been a source of wealth towards the countries that exploit the resource. North Sea oil has been utilized to refer to the oil and natural gas is present beneath the North Sea. The countries that exploit the North Marine oil and gas contain Netherlands, Norwegian, Germany, United Kingdom and Denmark. Most countries and especially companies that have been given license to use the resource have taken proactive measures of risk. Exploration beneath the ocean has led to a large number of deaths with the people involved and this has called for hefty investment in risk management tasks undertaken by companies.
The pipes that transfer the oil and natural gas by underground reservoirs to digesting plants which are mainly located some distance from the sea must be solid to withstand the waves inside the sea. Depending on weather improvements, waves change in their elevation and this call for contingency preparing otherwise weighty losses will be incurred by particular organization (Leslie and Michaels, 1997).
In the 1970s, the North Marine oil a gas businesses took aggressive measures in order to avoid heavy deficits that resulted when surf exceeded the height of 3 yards. The workers laid many pipes which will assumed the shape of H to maintain smoothness between the large barge and the ocean floor. The operators used ribbon and bow anchors to help buckles by raising and resetting the pipes at the barges. The operators had to be keen since improper lowering of plumbing would result into a water pipe buckle which will presented a critical threat in laying the pipes.
The excessive height of surf which exceeded the expected height led to further risk of pipe buckles due to uncontrolled lowering of pipes. The companies therefore was required to purchase a large number of steel plumbing to avoid holdups hindrances impediments incase of any water line buckle and this methods has not been cost effective while the company could have desired. Any kind of proactive assess that is taken to manage risk should be affordable, utility powerful and must therefore be maximizing rewards for the organization while reducing cost (Leslie and Michaels, 1997).
A powerful contingency organizing in managing risks in project needs good preparing and coordination of all the stakeholders in the project to ensure optimum desirable result. Risk management involves taking procedures in dealing with doubt. The North Sea and oil contingency planning that was followed in 19790s involves coping with uncertainty mainly because in beneficial weather conditions, there is certainly less cost involved in coping with risks as pipe buckles will be handful of and hence very few new water lines will be necessary to be laid. However , seeing that it’s hard to anticipate the height with the waves in the sea which will cause heavy losses in the event that unchecked, the firms that explore the gas and oil in the areas must consider precautionary measures (Leslie and Michaels, 1997).
Exploration of North Sea petrol any natural gas involves producing wealth to get the companies which might be undertaking the projects. The importance of contingency planning in the exploration job is very vital in risk management because it can used to assess the possibility of undersirable climate condition the industry threat towards the project. The assessment is definitely consequently accustomed to reduce the possibility of underperformance that will be realized when no procedures are performed to reduce or avoid the water pipe buckles. The price of replacing buckled pipes minimizes the profit perimeter that is noticed in the project and therefore successful contingency planning help to take care of the risk.
Effective contingency organizing helps to catch the benefits of fair weather. Uncertainness about climate is a danger that confronts the North Sea overseas pipe laying. If effective contingency organizing is discovered, long periods of bad weather can be sustained for the reason that project major should be able to understand and cope with the bad condition threat which can be inevitable. The project managers should make sure there is a lot supply of piping during undersirable climate condition to stop delays in replacing the buckle plumbing.
The task managers ought to observe great contingency preparing by ensuring the fact that oil and gas pipe are complete before the undersirable climate sets in and this will assist in reducing the expense associated with a contingency planning. Lounging pipelines with time helps in avoiding major gaps in the job which may bring about heavy economic losses.
Backup planning for lowering possible threats that are connected with North Ocean and olive oil exploration could be a possible means of increasing cash flow to the firms that are commencing the job. American project management start (PMI) believe there is a conceivable opportunity linked to the risks that threaten the project in the winter, bad weather conditions has been proven to lead to gas shortage generally in most cities which due to regulation of require, the prices boost.
This could be an opportunity for those corporations that are concerned with the job. Effective backup planning in managing risk North Marine oil and gas has created an opportunity to the firms undertaking the project. This is certainly attributed to the precautions used by the companies in anticipation of bad weather threat. The project involves investing in delivery before the contract begins. Most companies that want to protect themselves from the poor supply of the resources therefore get the resources prior to contract commences. The high demand has contributed to higher revenue derived from the project and this consequently leads to higher success (Leslie and Michaels, 1997).
Contingency preparing which is primarily associated with managing risks should not only focus on the hazards that hamper the success of the project nevertheless should also look at threats because an opportunity to achieve the goals of the project. Achievement of objectives means the task has prevailed. Therefore effective contingency planning in dealing with risks should recognize the close relationship of threats and opportunities. The actions taken by the job manager in reducing the hazards should seek to create a chance for brilliance (Leslie and Michaels, 1997).
Effective a contingency planning must not focus on taking care of threats. Rather the job should seek to identify the several sources of risks and consequently the right way to manage the potential risks. Focus on risks draw emphasis on the awaited failure. Therefore , assessing the many sources of uncertainty and how these uncertainties could be a threat for the project and consequently how to control the questions involves using effective a contingency planning.
North Sea coal and oil exploration is associated with various uncertainties which present numerous threats towards the project. Focus on the chances created by uncertainties managing can lead to profitability and accomplishment of the job. The project manager should identify the origins of uncertainties instead of managing risk first which will assist in addressing the root of the difficulty. Most assignments have did not meet the established objectives because of their failure to deal with the root with the problems. Superficial problem solving \ undesirable benefits. Therefore identification of the method to obtain uncertainties should be thought about as quick the risk administration process in effective a contingency planning (Leslie and Michaels, 1997).
Concern is present in each and every project and all stages of the project life pattern (PLC). The uncertainty is contributed by various reasons which are inescapable. All tasks success will be based upon various presumptions which are the primary sources of questions. Differences in the performance of project regarding cost, top quality and length that is required to complete the project provide a lot of uncertainties. In laying plumbing in the ocean in a way that will certainly avoid water line buckles engaged a lot of uncertainties. This is certainly attributed to the changing climate.
Its hard to forecast the height in the waves in the ocean within a particular time and this present source of uncertainties since its hard to know with certainty the expense of dealing with the threat as its hard to see the amount of plumbing to be knocked down and so requiring substitute (Leslie and Michaels, 1997).
Proactive risk management in the North Sea oil and gas project must be entrenched in both basic plans and contingency strategies. It’s argued that if the project focuses very much in being cost effective it’s sure to fail about risk management in certain occasions. Nevertheless , crisis supervision should just be used as principal management in some situations. However , crisis management will need to only be utilized as primary management setting if the risikomanagement fails entirely (Leslie and Michaels, 1997).
References
Leslie, Keith, M. and Michaels, Max, L. “The True Power of Actual Options. The McKinsey Quarterly 3 (1997): 134-225.
