This document discusses risk management services provided by Trigo White Ltd, including risk workshop facilitation, qualitative and quantitative risk assessment, and development of risk management plans and risk registers. It provides details on Trigo White's approach to facilitating risk workshops, including identifying, qualifying, and capturing risks and mitigation options. It also summarizes how Trigo White can perform quantitative risk assessment, including modeling the impact of risks on project schedules and costs, and determining an overall contingency level based on risk.

1. Trigo White LtdRisk Management www.trigowhite.com
Practical project risk assessment
APM Aberdeen
Robert Gordon University, Aberdeen
10th March 2015
Simon White
Consultant, Trigo White Ltd
+44 (0)7831 791 032
simon@trigowhite.com

2. Trigo White LtdRisk Management www.trigowhite.com
Risk management services
• Risk Management Plan development
• Risk workshop facilitation
• Qualitative risk assessment and analysis
• Risk register review
• Risk process design / review / implementation / audit
• Quantitative risk assessment and analysis
• Industry best practice
• Over 20 years’ consulting to a wide variety of industries
• Add value with risk management

3. Trigo White LtdRisk Management www.trigowhite.com
The risk workshop
• Valuable discussion: assumptions, inter-discipline issues, allows honesty
• Structured approach, best practice
• Engage project team, management and stakeholders
• Skilled facilitation, ensuring contribution from all team members, keeping focus
• Identify, discuss and qualify risks
– Cause, risk, effect
– Probability (H / M / L …)
– Impact on schedule, cost and safety, production, operations (H / M / L …)
• Capture mitigation options and fallback options
• Effect of mitigation
• Agree action owners and deadlines
• Make decisions – is it worth mitigating?
Probability Impact Score
Major scope change M VH 25
SIMOPS issues H L 17
DECC requires recycle L H 15
Delay to lift vessel arrival L M 9
… …

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The risk workshop
• Risks can be ranked and summarised
• Give focus on mitigation
• Establish agreement
• Demonstrate robustness
• What are our top risks? VH
Major
scope
change
H
DECC
requires
recycle
M
Delay to
lift vessel
arrival
L
SIMOPS
issues
L M H VH
Probability
Impact

5. Trigo White LtdRisk Management www.trigowhite.com
The risk register
• A useful live project document
• Prioritise, categorise risks
• Ranking, reporting of key risks
• Focus risk mitigation
• Track mitigation actions – progress and effectiveness
• Keep risk visible throughout planning and execution
• Risk analysis adds more value …

6. Trigo White LtdRisk Management www.trigowhite.com
Inputs for a risk analysis
• Base schedule (WBS)
– Around 50-300 activities
– “Forward-driven” logic
– Can use existing schedule, or create in a workshop
• Base cost estimate (CBS)
– Around 20-50 high-level cost elements
– Allowances / contingency identified
• Any risks already identified

7. Trigo White LtdRisk Management www.trigowhite.com
Quantitative risk assessment
• Quantify significant risks
– Probability (%)
– Schedule impact in days: P10, P50 and P90 (if it occurs)
– Cost impact in £: P10, P50 and P90 (if it occurs)
• Associate the risks with the schedule activities (WBS)
– E.g. “Delay to lift vessel arrival” will impact installation activities
• Associate the risks with the cost elements (CBS)
– E.g. “Delay to lift vessel arrival” will impact topsides cost
(optional)

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3 4 5 6 7 8 9 10 11 12
Probabilitydensity
Activity cost (MM USD)
P10 P50 P90
Quantitative risk assessment
• Further quantitative assessments
– Schedule variance (-10% / +30% for engineering activities)
– Cost variance (-5% / +10% for jacket fabrication cost)
– Variance accounts for:
• Estimating uncertainty
• Risks not specifically modelled
– Correlation (topsides fabrication costs are uncertain because of common
causes)
– Series / parallel impacts (poor weather and lift vessel delay are in parallel)

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Probabilitydensity
Total project cost (MM USD)
P10 P50 P90
23
Base = 16.4
Quantitative risk analysis
• The risk model shows the effect of the assumptions on the overall project
Base
estimate
(MMUSD)
Bulks 2.3
Fabrication 5.7
Transportation 1.9
Heavy lift vessel 1.6
Hook-up and
commissioning
4.3
Project services 0.6
Total 16.4
The P90 is a
"reasonably likely"
worst case.
Contingency at P90 = 6.6

10. Trigo White LtdRisk Management www.trigowhite.com
Quantitative risk analysis
• The total contingency can be shown (on average) against the individual
costs
0
10
20
Bulks
Fabrication
Transportation
Heavyliftvessel
Hook-upand
commissioning
Projectservices
Total
P90 contingency:
Total base cost:
6.6
16.4
23.0Total P90 cost:
MMUSD

11. Trigo White LtdRisk Management www.trigowhite.com
Quantitative risk analysis
• The total contingency can also be shown against different types of risk
0
10
20 Basecost
Technicalrisk
Non-technicalrisk
Total
P90 contingency:
Total base cost:
6.6
16.4
23.0Total P90 cost:
MMUSD

12. Trigo White LtdRisk Management www.trigowhite.com
Quantitative risk analysis
• The model shows the effect of the risk on schedule as well as cost

13. Trigo White LtdRisk Management www.trigowhite.com
Quantitative risk analysis
• The contribution of risks to the overall project cost or schedule can be
calculated
-1 -0.5 0 0.5 1 1.5
Variance of labour costs
Impact of SIMOPS issues
Impact of delay to lift vessel arrival
Variance of offshore labour rate
Variance of transportation rate
Impact of flotel unavailability
Impact of poor weather
MM USD
Contribution to P10 / P90
cost contingency
Contribution to P50
cost contingency

14. Trigo White LtdRisk Management www.trigowhite.com
Quantitative risk analysis
• The total contingency can be shown (on average) phased over time
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Monthlycost(MMUSD)
Base phasing
P10 phasing
P50 phasing
P90 phasing

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All this can be …
• Practical
• Defendable
• Valuable

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An example
• Offshore natural gas development
• Schedule: many assumptions, critical path, burn rates, weather
• Cost: management and partners require confidence, justification of
contingency, basis for decisions
• Production: delays hurt NPV
• Operability: shutdowns hurt NPV
• Busy multi-discipline team
• Busy project manager
• Need a meaningful risk report

17. Trigo White LtdRisk Management www.trigowhite.com
Full risk report

18. Trigo White LtdRisk Management www.trigowhite.com
Full risk report
• Documents risk identification and assessment process
• Shows who contributed to the process
• Includes risk register and all other assumptions
• Shows the model logic
• Gives full results
– Overall contingency on cost and schedule, with justification
– Breakdown of contingency by WBS, CBS and by risk
– Effect of mitigation
• Forms a permanent record of the team’s view of the risk to the project, at a
given point in time
• Refresh / update at each stage gate

19. Trigo White LtdRisk Management www.trigowhite.com
Benefits of risk analysis
• A valuable process
– Challenge project teams and base estimates
– Express uncertainty in the team’s base assumptions
– Capture risks, assumptions, issues, and their consequences
– Encourage open discussion amongst integrated team
• Demonstrate awareness of risk
– Agree and communicate the team’s view of the risk
– Justify contingency and mitigation efforts
– Allow challenges, discussion and negotiation
– Set realistic stakeholder expectations
• The risk model represents the perceived risk, and its logical
consequences

20. Trigo White LtdRisk Management www.trigowhite.com
About Simon White
• Over 20 years’ experience in risk management and risk analysis
– Wide variety of industries and major projects
– Three years as UK Risk Analyst for ConocoPhillips
– Previously Senior Risk Management Consultant and trainer for Pertmaster, Primavera and
Oracle
– Risk analyst for current major oil / gas projects such as Cygnus, Clair Ridge and Jasmine,
and a major government infrastructure programme
• Recognised as one of the leading practitioners of integrated project schedule and cost
risk management and analysis
– Methods allow project risk models to be interrogated and understood by project teams and
senior management
– Designed and built commercial risk software: Predict!, Arrisca, and a contributing architect to
Primavera Risk Analysis (Pertmaster)
– Develops tools for more practical and valuable project and business risk management.

21. Trigo White LtdRisk Management www.trigowhite.com
Questions?
Simon White
Consultant
Trigo White Ltd – Risk Management
+44 (0)7831 791 032
simon@trigowhite.com