Impact of Risks on Project and Planned Response to Other Risks
In the British Petroleum Project, various risks were identified through the risk management plan. During the implementation of the project, two major threats occurred. Oil spill and noncompliance of regulation by workers and part of the Directorate team carrying out the project. The occurrence of these menaces had a significant impact on the overall project life cycle. A fixed time for completion of the project and expected period to undertake the project was also laid out during commencement. As a result of the oil spillage, both times set out for completion and the projected budget was affected. The spillage was hazardous, leading to an immense fining of the British Petroleum company. The cost attached to the fine includes that of compensation to the disruption of the normal operations of businesses located along the spill areas. For instance, until when they resolve the peril, companies in the tourism industry will be compelled to stop business.
The total cost accompanying the settlement of the risk was estimated at 12.5 billion. The project finance department had expected and secured 2 billion for compensation plans in case of risk occurrence. The exceedingly high fine imposed from the oil spillage meant that the company would incur additional costs. These funds were to cater for other expenses during the project. Shortage of funds meant that the company had to look for alternative means for sourcing funds to pay the penalties imposed from the hazard. Also, a lot of wastage of crucial time in the process of settling the difficulty. The project and plans to be undertaken were put on hold for some period to ensure that the oil spillage is rectified and not result to greater damages. Also, the schedule to be conducted in the project was thus significantly affected by the risks. These changes, therefore, meant that there were a lot of adjustments which the project management team had to make in both the schedule and forecasted budget during the British Petroleum Project life cycle.
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The risk of noncompliance with regulation also hurt the project. Some of the employees were negligent in carrying out their duties. As a result of the remiss, there were a lot of human errors that occurred failing operations of the machines which triggered accidents to happen. The jeopardy caused by the defiance of rules and regulations set out on the project reduced the quality of work that was to be the outcome of the project. Also, it is from this negligence that the risk spillage accident occurred. These risks increased the vulnerability of the project as it can even result in its complete closure and discontinuity from being undertaken. This closure is because it plunders the reputation of the company ( Spence, 2011) . The other hazardous effects of the accident to its environment are socially unethical as it affects the livelihood of those reliant to the marine environs for their livelihood. The government can, therefore, decide to stop the implementation of the project to its completion.
Other risks such as personal accidents identified in the project management plan should be looked into to ensure that it does not occur. Various safety measures should be put in place so that workers who get injured in the course of duty get treated in time. Safety equipment such as helmets and other working garments should always be available in the working stations. In mitigating the risk of accident and its destructive impact on the project, safety training programs should be introduced by the British Petroleum company. The organization should also subject their workers and management team to drilling programs that will assist them to reduce the impact of damage which may result from accidents when work is in progress. Any changes should be communicated in time after the commencement of the project by those responsible. The impact of noncompliance with the regulatory requirements as a result of the changes should also be relayed to workers. Proper communication will help the company avoid inadvertent or unexpected accidents not caused by personal negligence or ignorance.
Mitigation of Risks
It is imperative to establish various risk reduction measures that will be used to curb the adverse effects of its occurrence. The British Petroleum project faces some setbacks that affect its smooth implementation. The disruption of the laid out activities to be completed within the set out time and the enormous costs incurred are avoided by the company when risks mitigation strategies are in place. To reduce the negligence rates of workers, Strict rules and regulations to be formulated in which failure to adhere to them have tough consequences such as layoff of employees. Other measures which can be introduced include fining of employees who are reckless in undertaking their assigned work and handling machines ( Smith, 2010) . These tactics will ensure that workers are keen when taking their assignments of the project. These measures will thus reduce the chances of occurrence of the noncompliance to regulations risk. Moreover, it will lessen the effect of the hazard on the project's completion time and the planned budget.
To avoid and reduce the effects of oil spillage, the British Petroleum risk management team should ensure that various mitigation measures are in place. The governing body of the company should be more responsible for ensuring that the machines used are in proper conditions and safety precautions are also strictly adhered to ( Hirsch et al., 2005 ). It will be essential for the management of the organization to employ technicians and other individuals with expertise to conduct continuous checks on the machines and other devices whose operation requires technical knowledge. The human resource department of the British Petroleum can ensure they carry out thorough scrutiny on those being recruited on board to be part of the project. This scrutiny will provide certainty that the project will be undertaken with much knowledge and not affected by poor quality work.
It is also recommendable that the company invests heavily in research that relates to oil spills. It is through these studies that the organization will identify the oil spill response technology which will be used to resolve the problem of oil spillage and prevent it from spreading far causing greater damages to the environment around the working station ( Baker, 1971) . The prior research will be of benefit to the British Petroleum project as it will be in a position to design the most efficient methods of natural gas and oil extraction processes. Moreover, the overall standards set by the oil industry governing bodies should be well adhered to ( Hirsch et al, 2005 ). These standards have been established to guide the operations of companies such as the British Petroleum and covers various aspects that will help to mitigate risks in these businesses. It includes areas such as minimizing the impact of oil extraction on the environment and achieving maximum operational safety.
The company should highly invest in training of its workers. The training will be of importance due to the accelerating changes that occur in the energy industry. These changes often result in workforce challenges in the petroleum sector which can be curbed on time through the training programs. For instance, the company can contract bodies such as the International Association of Drilling Contractors to offer its workers a Well Cap program. In case a new equipment is introduced when the project has commenced, the project supervisors should ensure that those operating the device should be highly qualified and also carry out their work as required. This monitoring will also help to prevent other personal accidents from occurring.
Adjustments on the Project Budget and Schedule with occurrence of risk
From the occurrence of risks, the forecasted budget to be used in running the project was affected. The funds set aside will be inadequate to complete the work as more will have to be outsourced by the project manager. The fines imposed on the company will compel the organization to increase the funds set aside. The other activities not completed by the time the hazard occurred will experience a shortage of funds. Also, it will be necessary to adjust the budget since the body governing the project is aware that risk management process requires more resources than that which was initially set.
The schedule in which the project was to be done is also adversely affected and requires adjustments. These changes will be because perils resulted to wastage of time that had been set aside for continuous operations. The working schedule outlined at the start of the period was fixed to provide details on the period it would take to complete the work. Slack time was assigned if they were to experience delays. The risk mitigation measures such as in-depth training of employees take time to implement. Also, the repairs to be undertaken on the parts that led to oil spillage also required time ( Kujawinski et al, .2011). These reconstructions might stretch into time allocated for an undertaking of other activities.
References
Baker, J. M. (1971). The effects of a single oil spillage. The Ecological Effects of Oil Pollution on Littoral Communities. EB Cowell, editor, Applied Science Publishers Ltd , 16-20.
Hirsch, R. L., Bezdek, R. M., & Wendling, R. M. (2005). Peaking of world oil production: impacts, mitigation, & risk management (No. DOE/NETL-IR-2005-093; NETL-TPR-2319). National Energy Technology Laboratory (NETL), Pittsburgh, PA, Morgantown, WV, and Albany, OR.
Kujawinski, E. B., Kido Soule, M. C., Valentine, D. L., Boysen, A. K., Longnecker, K., & Redmond, M. C. (2011). Fate of dispersants associated with the Deepwater Horizon oil spill. Environmental science & technology , 45 (4), 1298-1306.
Reddy, C. M., Arey, J. S., Seewald, J. S., Sylva, S. P., Lemkau, K. L., Nelson, R. K., ... & Van Mooy, B. A. (2012). Composition and fate of gas and oil released to the water column during the Deepwater Horizon oil spill. Proceedings of the National Academy of Sciences , 109 (50), 20229-20234.
Smith, L. C., Smith, M., & Ashcroft, P. (2010). Analysis of environmental and economic damages from British Petroleum’s Deepwater Horizon oil spill.
Spence, D. B. (2011). Corporate social responsibility in the oil and gas industry: The importance of reputational risk. Chi.-Kent L. Re v. , 86 , 59.
