ADVERTISEMENT

Inherent Flaws in Risk Matrices May Preclude Them From Being Best Practices

Risk matrices (RMs) are among the more commonly used tools for risk prioritization and management in the oil and gas industry. RMs are recommended by several influential standardization bodies, and a literature search found more than 100 papers that document the application of RMs in a risk-management context. This paper illustrates and discusses inherent flaws in RMs and their potential effect on risk prioritization and mitigation, addressing several previously undocumented RM flaws.

Introduction

In the oil and gas industry, risk-intensive decisions are made daily. In their attempt to implement a sound and effective risk-management culture, many companies use RMs and specify this in “best practice” documents. Furthermore, RMs are recommended in numerous international and national standards such as those from the International Organization for Standardization (ISO); NORSOK, the Norwegian standards organization; and the American Petroleum Institute (API). The popularity of RMs has been attributed in part to their visual appeal, which is claimed to improve communications.

Despite these claimed advantages, the authors were unable to find instances of published scientific studies demonstrating that RMs improve risk-management decisions. However, several studies indicate the opposite—that RMs are conceptually and fundamentally flawed.

The complete paper summarizes the known flaws of RMs, identifies several previously undiscussed problems with RMs, and illustrates that these shortcomings can be seen in SPE papers that either demonstrate or recommend the use of RMs.

This article, written by Special Publications Editor Adam Wilson, contains highlights of paper SPE 166269, “The Risk of Using Risk Matrices,” by Philip Thomas, SPE, and Reidar B. Bratvold, SPE, University of Stavanger, and J. Eric Bickel, SPE, The University of Texas at Austin, prepared for the 2013 SPE Annual Technical Conference and Exhibition, New Orleans, 30 September–2 October. The paper was peer reviewed and published in the February 2014 Oil and Gas Facilities, p. 56.
...
This article is reserved for SPE members and JPT subscribers.
If you would like to continue reading,
please Sign In, JOIN SPE or Subscribe to JPT

Inherent Flaws in Risk Matrices May Preclude Them From Being Best Practices

01 August 2014

Volume: 66 | Issue: 8

STAY CONNECTED

Don't miss out on the latest technology delivered to your email weekly.  Sign up for the JPT newsletter.  If you are not logged in, you will receive a confirmation email that you will need to click on to confirm you want to receive the newsletter.

 

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT