SPE Values Help Manage Risk

It is common knowledge that the petroleum industry deals with risks on a daily basis. Some of those risks are obvious to everybody and are universal (e.g., health, safety, and the environment). Some are a bit more obscure to the general public and are assessed by skilled professionals. For example, it takes an exploration geologist to evaluate geological risks and uncertainties to determine the possibility of success for a new opportunity. For large projects, multidisciplinary teams are shaped to analyze the wide range of unknowns and risks. These risks are managed in a portfolio of opportunities, which in turn provides a ranking.

But how do you manage future risks? You know what you know, and you know what you do not know. It is what you do not realize that you do not know that is the risky part! For such open questions about risks, scenarios are used. This could range from negotiation outcomes to industrywide, global scenarios. Here such questions are raised as: Can Wal-Mart become your greatest competitor and start giving energy away? Or, What if Sony began producing energy instead of using it?

Personally, I think that the risks facing the industry on an intermediate time scale include

Obviously, these risks cannot be seen apart from each other. Our industry currently makes a lot of money and needs good development prospects to ensure its health. At the same time, the job market is very competitive, making it difficult to fill in positions of both the aging baby boomers and the recruitment gap created in the 1990s. Finally, the reputation of the industry as a whole will define the public view on our operations and, hence, determine petroleum engineering enrollment.

How about our personal risks? I think that all the risks to which we are exposed to in our daily work can be mitigated through our professional conduct. SPE provides us with values, which helps us in our professional awareness. They are:

If we can bring these values in a proactive, constructive, and positive manner to our work each day, we have succeeded in being risk-averse petroleum professionals.