Project risk

Mark Cook is a Reservoir Engineer and Petroleum Economist. He has worked on international assignments mainly in Tanzania, Oman, the Netherlands and the UK. His main focus is in economic evaluation of field development projects, risk analysis, reservoir management and simulation. After 11 years with a multinational company he co-founded TRACS International of which he is Technical Director. 

Abstract Chemicals are part of different daily products due to the characteristics that they provide to them. However, their release into the environment during the end of the product s life can affect harmfully the environment and the citizens. The worldwide transport of these chemicals at a global scale increases this negative potential effect. In this sense, initiatives such as the RISKCYCLE project (risk-based management of chemicals and products in a circular economy at a global scale) are trying to assess the risks of these substances in a circular economy. 

This second volume of this book, Global Risk-Based Management of Chemical Additives, presents the results obtained after 3 years of research conducted during the EC funded RISKCYCLE project (Risk-based management of chemicals and products in a circular economy at a global scale). 

Clarke S., 1997. Violations as a Source of Project Risk, The international journal of Project and Business Risk Management, 1(2), pp. 155-167. 

Most project risk comes from two sources business requirements and technology infrastructure. It is common for a project team to evaluate complexity based mostly on the business requirements—the problem domain itself—and vastly underestimate the effort it will take to implement all the plumbing and supporting pieces that are not domain-specific. 

Begin with cycles that use small investments to tackle issues that represent high project risk. Typically, these risks fall into two categories requirements and technical architecture. More resources can be fed into successive cycles as confidence is gained. The idea is fractal a big project s single cycle can be composed of several smaller cycles of sub-projects. 

The company hazard review process was revised in June 1997 to combine reactive chemicals, loss prevention, distribution risk review, EHS review for safety and loss, project risk review, and technology center review. 

Ranky, R G., A generic, analytical method to assess process-related risk with case studies, The Project Management Institute (PMI) Risk SIG and the Institute for International Research (HR), paper presented at the Annual US National Project Risk Symposium, Houston, TX, May 22-May 26, 2006. 

A project risk is the probability of an event that negatively impact the project cash flow. 

Stickley, Dennis Risk Management in Gas Imports and Gas Project Risk Management, s.d., s.p., p. 5. 

David Wardlaw, VP-Project Risk Mgmt. Group... 

Data validation Level 4 EPA CLP projects Risk assessment Site investigation Confirmation for site closure... 

The model does not contain project risk analysis activities. 

A league table of top project risks is presented in Table 6.1. If these are relevant in a particular case but in practice treated casually or even ignored, then project budgets, schedules, and system functionality will almost certainly be compromised. This in turn is bound to affect the standard of validation. It is therefore painfully clear that project risk management is very important not only in terms of project delivery but also in terms of the operational compliance that the computer system will be capable of achieving once put into use. 

Project risks can be mitigated using a five-stage approach ... 

Identification of all activities, critical path, and key milestones (Gantt charts) Recognition and management of project risk Ensnring project prereqnisites are pnt in place Establishment of progress reporting method... 

A Supplier Audit is an opportunity to establish good working relationships among the likely project team. A collaborative conduct of an audit can greatly facilitate project strategy through a realistic, constructive assessment of capabilities, reducing overall project risk. An independent assessment provides objective review of the supplier capabilities. 

Unacceptably increase project risk by business-process reengineering instead of limiting the implementation to current established ways of working. 

Each alternative must now be looked at critically. Process design will specify the equipment needed. Estimating will give the capital cost. It is important that each alternative is designed and estimated on a relatively equal basis. The absolute cost will be important eventually, but, at this point, the relative cost of each alternative is more important. Don t forget to include all costs, not just capital. Operating costs for the new system must be known to allow project profitability to be calculated. When defining each alternative, make sure the project risks are specified. These will include but may not be limited to ... 

Market risk. Lower the volume and the price until the project is no longer profitable. If these numbers are feasible then the risk to the project is high. If they are out of the question, than the project risk is low. 

Has the lowest project risk old, proven technology well-known cost and schedule and proven operating costs. 

Has the highest cost and highest NPV, but appears to have a low project risk. 

---