16 September 2010
Taking risks and how to avoid them!
"‘Risk Management: with Applications from the offshore Petroleum Industry’ by Terje Aven and Jan Erik Vinnem,
A book review by Nicholas Newman
There is no such thing as a risk free world; we all take risks, both big and small. We would not have heard of
Microsoft Windows if innovators like Bill Gates had not taken certain risks, nor would we hear about people
climbing Mount Everest.
‘Risk Management: with Applications from the offshore Petroleum Industry’ by Terje Aven and Jan Erik Vinnem,
Springer 2007, is about how the offshore oil and gas sector should assess, manage and tackle risk of an offshore
installation’s complete life cycle from predesign to final decommissioning and disposal in the world’s tempestuous
The potential risks that the industry can face can be both financially and environmentally immense, as the recent
explosion on the Deep-water Horizon rig in the Gulf of Mexico has demonstrated. This book includes the fundamental
principles of managing and assessing risk in a scientific and methodical manner. It then illustrates with the best
practice methods used with real life examples based on the authors’ extensive experience of the development of the
For the industry’s practitioners, it provides a ready-made decision making framework in which to tackle decision
making in high risk environments where there is a very high degree of uncertainty. It then provides examples from
the North Sea, such as the Frigg oil and gas rigs, discussing how the operators met the challenges the scheme faced
at various stages in its life cycle.
However, from my knowledge of the world’s energy petroleum industry, it is clear that a detailed comprehensive
knowledge of risk management plays a vital part in decision-making. This book should also have included examples
from elsewhere in this worldwide industry.
For instance, Gazprom’s pioneering proposed project to develop the immense offshore Stockman gas field in the
Barents Sea, where engineers face the challenges of designing installations that can cope with icebergs crashing
into installations that need to operate in Artic waters up to 340 metres deep.
While in the operational phase, the challenges faced by oil and gas producers operating in the Cuban waters of the
Gulf of Mexico where operators face the ever-present hazards of fire, but also the dangers caused by the hurricanes
force winds hitting the region.
Even in the decommissioning stage, the issues raised in this book can be applied to the designers planning for the
eventual removal of new oil and gas offshore installations in the congested waters and earthquake prone waters off
Indonesia and Malaysia. Here, abandoning such rigs at the end of their life span is often not an option due to the
potential hazards to shipping, security and environment, such a decision would pose.
For designers of such installations, finding a technically feasible method to decommission and dispose such an
installation, in a manner that minimises such risks to costs, environment and personnel can prove challenging.
This book should prove essential reading for the industry’s decision makers, and prove useful in avoiding the
tragic and costly mistakes that caused the Deep-water Horizon explosion in the Gulf of Mexico.
Marks: 9 out of 10.
HardbackPrice: £ 108.00 Ebook Price £75.
Ref: ISBN-10: 1846286522