Shell Exploration Risks

RISK DEFINITION

(What is risk?)

Project risk is an uncertain condition or event that, if it happens to occur, has a positive or negative effect on one or more project objectives/deliverables. Risk events may have one or more causes and, as a result its occurrence may have one or more impacts. The possibility of a negative or positive outcome from an events, is made possible by causes that are either assumptions, requirements, constraints or conditions. For example a cause in construction could be the requirement off plan approval by the city council. The risk may be that council may take more time than previously anticipated to approve the design and plans. If this event occurs, there may be an impact on the project, scope, cost, schedule, quality, or performance.

Risk conditions can in many instances include aspects of the project’s or organization’s environment that will/do contribute to project risk, these may be undeveloped project management practices, lack of integrated management systems, concurrent multiple projects, etc.

Therefore Project Risk Management encompasses the processes of doing risk management planning, identification, analysis, response planning, and controlling risk on a project. The objectives of project risk management are to decrease the probability and impact of negative events in the project and increase the probability and impact of positive events.

Project Risk Management:

1. Plan Risk Management-The process of outlining the proper manner of conducting risk management activities for a project.

2. Identify Risks-The process of determining risks which may have an effect on the project and recording their characteristics.

3. Perform Qualitative & Quantitative Risk Analysis-The process of prioritizing risks for further analysis by assessing and combining their likelihood of occurrence and impact, and the process of numerically analyzing the effect of identified risks on overall project objectives/deliverables.

4. Plan Risk Responses-The process of developing options and actions to further enhance opportunities and reduce threats to project objectives/deliverables.

5. Control Risks-The process of implementing the risk response plans developed in the previous step, tracking identified risks, monitoring remaining risks, identifying new risks, and assessing risk process effectiveness throughout the project.

RISK IDENTIFICATION

The process of determining risks which may have an effect on the project and recording their characteristics. The key benefit of this process is the recording of existing risks, the knowledge and ability it provides to the project team to anticipate future risk events. This