Health, safety, and the environment remains among the top priorities for oil and gas companies, reflecting an attitude of zero tolerance for accidents, Ernst & Young said in a recent report on a survey of more than 100 executives from 90 companies in 21 countries.
"The oil and gas industry is undergoing an intense focus on safety and environmental risk preparedness and mitigation," said Dale Nijoka, E&Y's global oil and gas advisory leader. "In light of corporate social responsibilities, economic challenges and regulatory pressures, it has become increasingly clear that managing these risks is vital for long-term sustainability."
The findings were outlined in "Business Pulse: Exploring the dual perspectives of the top 10 risks and opportunities in 2013."
The report said executives also listed price volatility, access to reserves and markets, cost escalation, and uncertain energy policy as business risks.
"Regulatory compliance is a challenge in any industry," E&Y said, adding oil and gas companies are compelled to operate in a variety of regulatory situations.
"New methods of extraction, such as hydraulic fracturing, present risks to regulators who are unsure of the wider impact of their large-scale use," the report said.
A new entrant into the top risks this year was information technology security, and specifically the threat of cyber attacks or cyber theft of intellectual property.
Additionally, another risk warranting its own category was increasing project scale and complexity. As megaprojects become more common, the industry's record for delivering on time and on budget is under increasing scrutiny.
John Avaldsnes, another E&Y global oil and gas advisory leader, added, "There is a renewed focus on the complete capital project life cycle. Poorly managing these issues reduces the ability to positively affect project performance and value. Having a clear definition of what constitutes 'acceptable risk' for a project diminishes the risk that remains. Aligning operations through performance management is crucial."
