The UK-based Institute of Risk Management (IRM) has released Fuelling the Debate Report to provide insights and thought leadership for risk managers in the energy sector including oil and gas, energy and renewables
In addition to exploring the survey results, IRM has asked industry leading specialists to provide advice on how risk managers can improve their performance and relevance across a range of topics, from safety and sustainability to improving risk maturity and building effective risk cultures.
The energy sector is undergoing rapid changes. After several years of belt tightening and cost cutting, many oil and gas companies are looking to expand into new projects, territories and renewable energy sources, according to the survey.
Naturally, cost control and safety remain key areas of focus. However, the survey found that companies plan to invest in new projects because they are confident that they will achieve profits despite a long period of low oil prices.
Strategic risks, the global economy and an evident skills gap are considered top risks. Only 27 per cent of respondents rated green energy as an area of concern over the next five years, raising the question whether the sector has fully digested the regulatory changes that will, for example, see electric cars as the norm in Europe after 2035.
Socrates Coudounaris, CFIRM, chairman of the IRM and Risk Management Director, RGA International Reinsurance Company, said, “Excellence in risk management requires a strong understanding of general concepts and techniques but also an appreciation of the detailed risk landscape in particular sectors.”
“We intend to develop an ongoing special interest group for the energy sector that will support risk professionals in the field. It is particularly interesting to note that one of the conclusions of this document is that there is great scope for raising levels of risk maturity in this globally important sector. This will require attention to various aspects of risk management and particularly to competence, training and education, raising them to world-class standards. The IRM stands ready to play its part in this process,” he added.
The survey also assessed the level of risk maturity across the industry. The results showed that the sector scored only three out of five. Domenic Antonucci, CMIRM, described this as, “Disappointing for a sector with the history, sophistication, management talent and resources of oil and gas,” in moving up the risk maturity curve for the oil and gas sector.
President of Baldwin Global, Alexander Larsen, CFIRM, IRM trainer and chair of the Energy Special Interest Group, commented, “Going forward, with the IRM’s support and drive, and with the setting up of the IRM’s Energy Special Interest Group (SIG), we expect that the SIG will continue to drive excellence and thought leadership through numerous initiatives such as publishing of individual expert insights and articles as well as working towards establishing a regular maturity benchmarking assessment of the industry with established and agreed benchmarking criteria.”
