Managing Offshore Operational Risk in a Low Oil Price Environment
Offshore Risk: Managing Offshore Operational Risk in a Low Oil Price Environment
By: Mike Neill, Petrotechnics President – North America
ONE YEAR AGO, I shared how operators were adjusting their operational risk management initiatives to lowering oil prices (OGFJ, April 2015). Since that time, prices have continued to fall, and the industry is now accepting this downturn will be protracted.
Many operators are taking a conservative view. ConocoPhillips’ CEO Ryan Lance stated in February, it was smarter to plan “lower for longer.” He also added ConocoPhillips is “…trying to drive [its] portfolio down to as low cost of supply as [it] can,” a tactic which, no doubt, will be repeated by most International Oil Companies (IOC).
Producing basins are squeezing lifting costs, rationalizing capital spend, and disposing assets with minimal operating margins at prevailing prices. It is a familiar pattern which many of us veterans in the industry have seen repeated during such cycles.
Unfortunately, the threat of Major Accident Hazards (MAH) does not turn down with the oil price; so, how should we behave to properly manage our risks?