Turning capital project uncertainty into positive certainty by better defining manageable risk
Robert GrayPricewaterhouseCoopers
The APPEA Journal 51(1) 423-438 https://doi.org/10.1071/AJ10027
Published: 2011
Abstract
We are all stakeholders in the development of better practices to address the challenges presented by the opportunities and responsibilities that exist in our industry. Navigating the path between uncertainty and positive project outcomes can hopefully help to generate informed decisions as well as a thorough consideration of all the relevant risks. Many risk management roles have, however, tended to develop into compliance-style functions. This paper tackles the inconsistency of risk management application via a new approach, encompassing three elements: taking a new look at some fundamental concepts; making subsequent adaptations to some familiar tools; and applying these ideas to oil and gas investment projects. At the conclusion of this paper, project managers, sponsors and boards should have a new appreciation for how the industry might further improve its performance in tackling uncertainty on complex project investment decisions.
Robert Gray has, over many years, advised on a number of large, complex investments in the oil and gas, power, utilities and government infrastructure sectors. He has worked in more than 30 countries while based in London, Melbourne, and now the Perth office of PwC’s global network of firms. Rob’s specific oil and gas sector advisory experience has been working with complex capital projects undertaken by BHP Billiton, BP, Caltex, Enron, Gaz de France, Gazprom, PetroSA, Santos, Sasol, Shell, Suncor Energy, TNK-BP and Woodside. Rob has recently concentrated on improving the way risks and capital adequacy are incorporated into project and transaction decision-making. In addition, he has focused on how the concepts of risk appetite and risk resilience apply to different types of investment projects. Finally, he has conducted independent peer reviews on a number of major capital projects, sponsored by both government and corporate clients. Rob is an economist by background, and graduated from the University of California in economics/international areas studies. He is a Chartered Financial Analyst (CFA) charter holder. Rob’s exposure to the resources sector runs deep; before joining PwC, he worked on the commodity derivatives trading desk for a global investment bank in New York and London. Member: Association of International Petroleum Negotiators. robert.c.gray@au.pwc.com |
