Risk and opportunity. Managing risk and opportunity is a continuous process that requires companies to consider not only the most common risks, but also to have experience mitigating unexpected events. In the oil and gas industry, it’s never been more important to manage health, safety and environmental risks, given the rising complexity of operations and the close scrutiny by regulators and stakeholders. Risk identification and evaluation is a continuous process throughout a project’s life cycle and across the project portfolio, taking a systemic perspective that considers projects, their phases and relevant risks.
Leading companies work with contractors to determine how risk and opportunity will be shared. This can forge a much closer relationship than simply trying to transfer risk to contractors while reducing cost and risk for the managing organization.
Engineers and builders in the oil and gas industry face daunting and unprecedented challenges as they design and construct the infrastructure to extract and process the resources that will power the global economy over the next few decades. Few large projects in the planning stages will stand the test of time like the Colosseum. But that doesn’t diminish their importance or suggest they should be undertaken with any less rigor. As the oil and gas industry embarks on a new generation of major projects, project managers will need to rely on coherent, consistent reference frameworks that guide their decisions and engage the most competent talent they can find in order to keep pace.
Roberto Nava and Tiziano Rivolta are partners with Bain & Company in Milan. The authors would like to acknowledge the contributions of Max Panaro and Giacomo Franchini, both with Bain & Company in Milan.