Professional Documents
Culture Documents
and development
How to manage the risks?
Eitan Glazer, Partner
Energy Practice Leader
PwC Israel
PwC
PwC
400
200
May 10
Jun 10
Jul 10
Aug10
Sep10
Oct10
What is risk?
Likelihood
Extreme
Likely
High
Possible
Medium
Unlikely
Low
Very
Unlikely
Minor
Moderate
Major
Severe
Critical
Impact /Consequence
PwC
Midstream
Downstream
PwC
Technical Risks
Economics Risks
Commercial Risks
Organizational Risks
Political Risks
PwC
Technical
Risks
Exchange Rates
Price and pricing (Supply & Demand)
PwC
10
TECOP (Cont)
Long term contracts
Regulation
Energy prices
Customers
Commercial
Risks
Competition
Legal
Insurance
PwC
11
TECOP (Cont)
Supply chain (weak link)
Cooperation between teams along the chain
Project management
IP
Fraud
PwC
12
TECOP (Cont)
Government involvement
Regulatory Environment
Environmental issues
Political
Risks
PwC
Construction permits
Stake holders
Geo-political risks
13
Risk Universe
Technical
Economical
Commercial
Organizational
Value Chain:
Development
Sourcing
Production
Distribution
Exploration
Infrastructure
Business Continuity
Physical Assets:
Maintenance
Plant and Equipment
Inventory
Storage
Pipes
Knowledge:
Intellectual Property
Advanced
Technology
Data Management
Knowledge Transfer
Information Technology:
IT Security and
Controls
IT Availability and
Continuity
IT Integrity
IT Infrastructure
Disaster Recover
Budget
Regulatory:
Trade
Foreign
Regulations
Labor
SEC
Environmental/Cli
mate Change
Privacy
Product Integrity
Healthcare
Emerging
Regulation
Legal:
Litigation
Contracts
Liability
Legal
Governance:
Board Structure &
Performance
Tone at The Top
Corporate
Monitoring
Organizational
Structure
Standards of Business
Conduct :
Ethics
Integrity
Corporate Social
Responsibility
Fraud
Legal:
Litigation
Contracts
Liability
People:
Culture
Recruitment &
Retention
Compensation &
Benefits
Development &
Performance
Health and Safety
Knowledge:
Intellectual Property
Advanced
Technology
Data Management
Knowledge
Transfer
PwC
Market:
Interest Rate
Foreign Currency
Commodity
Economic
Performance
Liquidity and Credit:
Cash Management
Borrowing
Hedging
Credit and
Collections
Insurance
Accounting and
Reporting:
Reporting and
Disclosure
Control Environment
Tax & Taxation
Accounting
Capital Structure:
Debt
Equity
Market Dynamics:
Competition
Socio-Political
Economic Factors
Market Movement
Globalization
Emerging Markets
Political
Planning and Resource
Allocation:
Business Strategy
Regional Strategy
Planning &
Forecasting
Due Diligence
Acquisition and
Divestiture
Political/Charitable
Contributions
Stakeholders:
Shareowner
Business Partner
Distributor
System Integrator
Customer
Supplier
11
OS3
S4
OP15
F3
OS1
S2
C4
OS2
S3
S7
C2
F2
F4
OP3 F7
OS4
C1
OS6
S5
F5
F6
OP5
S6
OP14
OP10
S1
OP8
F1
OP9
OP13
OP2
OP12
OP11
OP4
OP7
OP1
C3
OP6
0
0.00
PwC
1.00
2.00
3.00
4.00
5.00
15
PwC
17
Current risk
Target risk
Likelihood
Very
Likely
Likely
Possible
Unlikely
Very
Unlikely
T
Minor
PwC
Moderate
Major
Severe
Impact /Consequence
Critical
18
Evaluation
Development
Implementation
PwC
Risk survey
Risk universe
Heat Map
Work Plan for risk framework
Risk policy
Risk procedure
Organizational infrastructure for risk
management
19
Proactive
Mechanism
to identify
Risks
Establishing
Business
Flexibility
to Survive
Risk Events
PwC
Connecting
the Business
Strategy to
the Risks It
is exposed to
20
1
2
3
Raise readiness to
respond
PwC
PwC
Understand risk
better
Be prepared
Strengthen
checks & balances
Understand whats
really going on
Be Aware!
Be Prepared !
Be Proactive!
Eitan Glazer
Energy Practice Leader
PwC Israel