The world's national oil companies (NOCs) are taking center stage in terms of their dominance of world oil reserves and production. At the same time, they are becoming more sophisticated in the way they identify and manage risks. They must now contend with political unrest or terrorist attacks, natural disasters, opposition from environmental groups, and even the risk that governments will mandate more non-petroleum fuel use, thereby changing the dynamics of global energy markets. "The world's desire for environmentally friendly energy sources appears to be rising faster than global temperatures. This is a growing risk to all energy producers-one that goes well beyond a fire at a plant, or a tanker that runs aground," said Brian Storms, chairman and chief executive of Marsh Inc., at the opening of the firm's first NOC conference in Dubai recently. "What's important for you as large producers of hydrocarbons is to view this risk honestly and address it strategically. "Finding opportunity in risk is less likely to happen if risk is managed purely as a tactical function, rather than incorporated into your overall strategic planning," Storms told delegates from some 30 countries such as Nigeria, Azerbaijan and Brazil. Marsh has had a presence in Dubai for seven years. For more on this, see the April issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

Comments