ACCESS to reserves is the biggest risk to oil and gas companies, according to a report published today by Ernst & Young.
The study was based on interviews with oil and gas executives, academics and commentators in 15 countries and it ranks the risks and opportunities facing the sector over the next 12 months.
Andy Brogan, UK oil and gas leader at E&Y, said: “While limits on access are not new, the combination of political unrest in North Africa and the Middle East, high oil prices and the growth of new state-backed rivals has pushed the issue back to the top of this year’s risk list.”
Health, safety and environment is a new entrant to the top 10 risks list.
E&Y said this may be a consequence of last year’s BP oil spill in the Gulf of Mexico and Shell’s North Sea leak.
Alec Carstairs, office managing partner at E&Y Aberdeen, said: “The industry is facing more complex operational challenges than ever before. Companies will have to demonstrate they have an in-depth understanding of their maintenance and operational risks – and have the processes and robustness of people in place with regards to the risk of major incidents.”
The report identified “frontier” acreage as the top opportunity open to oil and gas firms, adding that areas once regarded as too difficult, expensive or politically unstable to justify operations have become economically viable.
Mr Brogan said: “This is largely driven by advances in technologies and business process. A proliferation of new technologies has enabled companies to go farther afield and move into places that are more challenging than those they have historically operated in.
“The oil and gas sector is undergoing the most significant changes we have seen for years, with new business models, companies and sources of energy emerging.
“Those organisations that manage the complex, evolving risk landscape will be the key players of tomorrow.”
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