Oil and Gas: Exploration and Risk

Abstract

Risk analyses entail a multi-dimensional matrix that considers scalable political, economic, social, technical, environmental, and safety factors. Risk is the probability of an event occurring multiplied by the magnitude of its adverse consequences. The risk of offshore exploration is addressed through development and implementation of mandatory safety management systems (sms) vetted by regulatory bodies and third-party certifying agencies. Risk management processes within the sms are employed throughout all stages in exploration projects, from the conceptual planning stage down to each work shift on deck. This essay considers risks to frontier and offshore oil and gas exploration, as opposed to the risks of oil and gas exploration. The issue is considered in a Canadian context. Meaningful commentary on exploration risk requires an outlook on global energy demand and socio-economic trends. Today, there is uncertainty as most major energy players are looking inward, re-assessing and adjusting their business models and re-baselining their market projections in response to the steep market downturn. The risks to conducting oil and gas exploration programs are always dynamic, but particularly complex under depressed market conditions.