The risk profile of the oil and gas sector is on an upward trajectory. Integrated players are exposed in both upstream and downstream operations to rising environmental and financial concerns. The causes are legion: the financial, environmental and safety implications of working in more challenging locations and with harder-to-extract, harder-to-process resources; increased government and societal expectations about cleaner operations and cleaner products; competition from substitute products; and, in many regions, underlying geopolitical and fiscal instability. Meanwhile, a growing trend exists for contractors to push risk back onto operators.
There is no template for value chain participation that fits every company. Each must determine its desired risk profile and create alignment between that profile and the company's participation model. Understanding and managing risk—largely through controlling complexity and improving sustainability—will separate the leaders from the followers in the volatile years to come. An example is ExxonMobil, which has created an operational integrity management system (OIMS) to respond to the issues of reliability and integrity management.
See full Article: http://www.atkearney.com/paper/-/asset_publisher/dVxv4Hz2h8bS/content/challenging-the-integrated-oil-and-gas-model/10192
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