Avoid consequential cost with offshore risk management

Offshore Terminal Risk Management: How to avoid consequential cost

Consequential costs of unmitigated risks or unexpected events can harm your company. An offshore terminal risk management plan can make all the difference!

Whether financial or reputational, consequential costs of unmitigated risks or unexpected events can harm your company. As in most industries, the offshore oil and gas industry holds a great amount of risk. Avoiding risk is not possible, but a holistic offshore terminal risk management plan can make all the difference.  

What is a holistic offshore risk management plan?

Looking at risks in isolation can blind you to their overall consequences and potential for snowball effect. This can cause you to misjudge the likelihood of the risk to occur and the severity of the outcome.

A holistic offshore terminal risk management plan looks at the bigger picture, taking into account fiduciary duties, design, operations and protocols to draw inferences and connections between the risks at hand. Find out more about MARSOL’s holistic approach here.

As every offshore terminal is unique, it stands to reason that every offshore risk mitigation plan must be too.  

The terminal risk management plan is not a stagnant document buried in your ‘what if’ vault. Instead, it acts as a process, integrated with your project lifecycle. 

Offshore terminal risk mitigation within the SPM integrity Management process flow

The goal of a holistic offshore risk management plan

First and foremost, as with any risk mitigation plan, the holistic offshore terminal risk management plan aims to protect the stakeholders’ interests, but it also aims to achieve integrity management through a single point of responsibility or single custodian of the process, while maintaining cost efficiency. 

Finding the root cause

For an offshore risk management plan to work effectively, it must be proactive, not reactive. For this reason, your maintenance team should not be chasing symptoms and effects. Instead, cast your attention to finding the root cause by means of data collection and analysis. 

Some items for your SPM integrity management and risk mitigation plan to consider:

  • Records control/data collection
  • Assets & Spares Management
  • Preservation and Maintenance
  • Compliance to Guidelines

Having this control point or custodian perform the appropriate risk mitigation tasks at regular intervals of your process helps you to identify potential points of failure and to manage them proactively.

Managing Potential points of failure

Adding another dimension to the classic bowtie analysis, MARSOL’s holistic approach uniquely makes room for adjustment and interference before the effect and eventual consequences follow. 

CAUSE → EFFECT (perception snowball) → CONSEQUENCES

In most cases it is lack of maintenance (CAUSE) that causes damage to assets and potentially the environment. (EFFECT). The Consequences, however, may include scenarios like the Tanker making protest letters that could affect how your insurance deals with a claim.

Consider for example these causes, effects and consequences:

Examples of offshore terminal risks and the outcome if unmitigated

In order to effectively integrate your offshore risk mitigation plan into your terminal operations, you can consider an activities layout similar to the MARSOL layout below.

This type of activities layout combined with the integrity management process flow above should provide you ample opportunity to investigate root cause and management potential points of failure before consequences set in, but as every terminal is unique, we suggest booking a consultation to discuss your terminal conditions for best results.

Offshore terminal risk management within the operations and maintenance layout

Isolating consequences to avoid the snowball effect

The snowball effect occurs when a single event triggers a second event and the second event causes further events. 

When a snowball effect occurs, the root cause becomes harder to identify, and many O&M providers may end up treating what they believe is the root cause, but instead, it is merely a second or third effect caused by the initial trigger. 

Such occurrences raise doubt in your company and can escalate the concern to reputational damage such as loss of trust, and financial implications such as work stopping or legal consequences. 

Conclusion

As with all aspects of the offshore terminal, risk must be considered holistically. If you do not understand the bigger picture, unforeseen consequences can creep in and harm your company. Don’t let that happen to you. Get in touch for a consultation about offshore terminal risk management today.

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