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Leadership, Knowledge, Solutions…Worldwide.
Project Risk Management for Cyprus
Nicosia 28th March 2014Paul.T. [email protected]
Managing Director
Marsh Energy Practice; London
Right from the StartRight from the Start
Marsh—Leadership, Knowledge, Solutions…Worldwide. 219/04/23
Marsh & McLennan Companies
Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), which has over 54,000 employees worldwide and approximately $12 billion in annual revenue.
Marsh & McLennan Companies
Marsh
A global leader in insurance broking
and risk management.
Mercer
A global leader in talent, health,
retirement, and investment consulting.
Guy Carpenter
A global leader in providing risk and
reinsurance intermediary
services.
Oliver Wyman
A global leader in management consulting.
NERA Economic Consulting
Competition, regulation, public
policy, finance, and litigation
2
Marsh—Leadership, Knowledge, Solutions…Worldwide. 3
The Benefits of Risk Management – Right from the Start
Risk Management– The protection of:
Assets. Revenue. Liability to others.
– Broadest analysis– Minimum cost
Benefits to Cyprus– World-class HSE for all
future facilities.– Cyprus’ balance sheet is
protected by risk transfer.– The people of Cyprus will
see the benefits of best in class risk mitigation and impact on your beautiful island home.
Marsh—Leadership, Knowledge, Solutions…Worldwide. 4
LNG Projects – Best Risk Management Practice from Day 1
Marsh—Leadership, Knowledge, Solutions…Worldwide. 5
Project Risk Management
A sequence of project phase activities to assist Cyprus based projects manage risk exposures ‘right from the start’ in order to:
Attract finance.
Minimize insurance costs and cost of risk over project life cycles.
Enhance HSE quality at the earliest possible and most cost effective stage.
Seek to satisfy all project stakeholders’ interests.
Marsh—Leadership, Knowledge, Solutions…Worldwide. 6
Project Risk Management - The Process
0 6 10 18 20 42 48
Feasibility Study
Preliminary Design
EPC Contractor Selection
Detailed Design
Procurement
Construction
Commissioning
1A
1B
5
3
2
3
4
4
4
Operation
Contractual Risk Review and Insurance Specification
Ongoing Risk and Insurance Services
Project Risk Register
Insurance Broking Services
Pre-Start Up Loss Control Review
3
Typical Schedule (months)
Design Phase Risk Review
4
5
2
1A
1B
Marsh—Leadership, Knowledge, Solutions…Worldwide. 7
Project Risk Registers (Risk Action) - Planning for Cyprus
Risk - HighRisk - High
Risk - HighRisk - HighRisk – Moderate to HighRisk – Moderate to High
Risk – Moderate to HighRisk – Moderate to High
Risk – Very HighRisk – Very HighRisk - HighRisk - High
Risk – Low to ModerateRisk – Low to Moderate
Risk – Low to ModerateRisk – Low to Moderate
Risk – LowRisk – Low
9876432 51
9
8
7
6
4
3
2
5
1Insignificant
Minor
Moderate
Major
Catastrophic
Remote Unlikely Medium Likely Expected
Resource AllocationResource AllocationMM
Customer NeedsCustomer NeedsHH
EfficiencyEfficiencyII
Product Life CycleProduct Life CycleLL
BrandBrandAA
CompetitorCompetitorGG
Budgeting and ForecastingBudgeting and ForecastingBB
Succession PlanningSuccession PlanningOO
Business PortfolioBusiness PortfolioCC
Investment EvaluationInvestment EvaluationKK
Change ReadinessChange ReadinessDD
Mergers & AcquisitionsMergers & AcquisitionsNN
Competencies/SkillsCompetencies/SkillsFF
Hiring/RetentionHiring/RetentionJJ
Business InterruptionBusiness InterruptionPP
CommunicationsCommunicationsEE
M
HL
A
G
B
C
K
D
N
Q
F
J
P
E
R
I
O
1A
Marsh—Leadership, Knowledge, Solutions…Worldwide. 8
Design Phase – Ranking of Risk Quality
4 – excellent3 – good2 – average1 - basic0 - poor
Risk ranking:– Achieves project due-
diligence and differentiation.– Best in class risk mitigation.– Widest insurance coverage
to protect Cypriot interests.
0 1 2 3 4
Location
Site Layout
Process Area Layout
Inventory Control
Engineering Standards
Piping
Process Control
ESD Design
Combustion Safeguards
Machinery Protection
Utility Systems
Pressure Relief & Flare
Drainage
Control Room Design
Process Buildings
Fireproofing
Fire & Gas Detection
Fixed Protection
Firewater System
LNG Storage
Jetty
Pipeline
Security
QA/QC
Hazard Analysis
Operational
Canaport LNG Project - Risk Ranking
1B
Marsh—Leadership, Knowledge, Solutions…Worldwide. 9 9
Ensure the Ultimate Risk Never Happens!
AfterBefore
Marsh—Leadership, Knowledge, Solutions…Worldwide. 10
Marsh Cyprus - Services and Solutions
Risk Management Services and
Solutions
Claims Management
Services
PoliticalRisks
TradeCredit Risk
Risk Transfer and Insurance
Broking
Professional Liability
Property Risks
EnvironmentalRisk
EmploymentPracticesLiability
RiskConsulting
Public entities
Serving:
Multinational organisations
Large national firms
Small and medium enterprises
Associations and affinity groups
Private clients
