Implementing Risk Management Within Middle Eastern Oil and Gas Companies
ERM now is a hot topic and a contemporary area intraditional risk management discipline.
dollars). MECO has some of the largest proven crude oil reserves, and is one of the largest daily oil producers across more than 100 oil and gas fields in the Middle East. Currently, MECO has an exclusive right to explore in key countries across the Middle East, although there has recently been a huge interest in entry to the countries by large international oil companies (IOCs). This interest comes despite the political unrest across the region and the constant threat of wars. Additionally, while in the past there has been little threat of IOCs receiving rights to explore, recently there has been pressure on MECO to improve efficiency, as it lags significantly behind the IOCs. Despite having exclusive rights, there is also the concern about diminishing reserves, and therefore a key focus for the organization is exploration and finding new oil fields.
Risks that occur frequently in O&G industries are political risk,environmental risk, operational risk, market risk; climate change risk, financial risk; regulatory risk;and, strategic risk, and these risks are increasingly evident, particularly during and after financial crises(Jalal-Karim 2013; Othman and Ameer 2008). Financial rises 1997–1998 have badly affected Malaysiancompanies and it is mainly due to the poor risk management (Yazid and Muda 2006).
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