INTRODUCTION

According to (Portny, 2017), projects have been in existence since the beginning of time. The
evidence of such statement can be realized in old testimonies such as the pyramids of Giza, the
construction of the Ark by Noah, the gorgeous portrait of Mona Lina by Leonardo da Vinci and
the list can go on and on (Portny, 2017). Even today we continue to witness outstanding projects
being executed at different magnitudes, complexity, and industries. Due to changing times and
expectations from end-users, the risks associated with undertaking a project has increased
drastically (Portny, 2017). This has necessitated the need for efficient project management and
the adoption of effective management techniques to achieve the desired project goals (Portny,
2017). According to Kloppernbord et al., (2019), if there is an event or phenomenon in a project
which ultimately threatens the successful achievement of any project goal, it is regarded as a
project risk. One of the most paramount roles to be played by a project manager is to ensure that
project key deliverables and other client’s project expectations are well managed (Khan, 2006).
Irrespective of the industry, it could be the industrial, manufacturing, private or even public
enterprise, efficient and effective project management plan can also ensure successful
management of other key project deliverables such as time, quality, cost constraints and risks
(Khan, 2006). In this assessment, we shall look at project risk management. Discussions
including topics such as risk identification and the great benefit that could be offered by a well
prepared and pragmatic project risk management plan will be covered. Furthermore, project risks
can greatly affect the project progress adversely hence, the understanding of risk categories and
creation of a risk response plan will also be touched.

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QUESTION 01 : THEORY

Project Risk Management

According to (Portny, 2017), being able to recognize a potential future event in a current or new
project that has a great possibility of posing a threat to a project’s success is one of the first step
in being able to control project risks. One of the first key steps in controlling and managing a
successful project is to gather all necessary project information and create an effective and
pragmatic project management plan. The plan shall be able to greatly assist in producing project
deliverables within budget and on time (Portny, 2017). Irrespective of the size and complexity of
the project, the approach to creation of a new project management plan is similar. The key
variance in the technique is on the time and effort spent on risk analysis of the overall project.
The bigger and complexed the project is, the more time it will need for thorough risk evaluation
process (Kloppernbord et al., 2019). Basically, the actual purpose of risk management in a
project is to be able to minimize project risks to a level and point that is more acceptable to
project sponsors and involved stakeholders. Furthermore, risk management also includes
monitoring and controlling the found risks in accordance to the established plan (Kloppernbord
et al., 2019). Risk management plan can be defined as the process of determining exactly how to
conduct risk management activities for a project. But more significantly, is it the project mangers
duty to familiarize with project objectives to be able to effectively plan for project risk
(Kloppernbord et al., 2019).

Benefits of Project Risk Management

According to Kloppernbord et al., (2019), the moment the whole project team have thorough
comprehension of all the project success measures and priorities, then the whole focus and
attention can be shifted to understanding the project risks. The more unique the project is, the
more it shall have uncertainties and unknowns which will eventually contribute to potential
project risks. A project risk can be defined as anything or phenomenon or possible occurrence
that may affect the project team’s ability to successfully achieve the anticipated project success
measure and stakeholder expectations (Kloppernbord et al., 2019). Hence a risk management
plan describes how risks are to be prioritized and monitored for changing priorities and on top of
that how risk management activities will be planned and executed. (Kloppernbord et al., 2019).

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The following are some of the key benefits of having a project risk management technique to an
organization (Eby, 2022) :

 Opportunity for Identifying and Avoiding Risk is Increased – The risk management
technique basically makes it much easier and practicable to be able to reduce and even
avoid risks. It consists of processes to identify potential risks at a very early and more
convenient stage (Eby, 2022). The risk management process helps greatly when it comes
to addressing the found project risk as they are still at their early and manageable stage
rather that having to deal late with a found risks as that will bring greatly adverse and
hard to control conditions (Eby, 2022).
 More Accurate Project Projections are Achieved – The risk management process assists
in ensuring that the key project projections and deliverables are successfully achieved
(Eby, 2022). In a case where budget is a constraint, having a well-prepared risk
management technique will allow early identification of risks and their impacts on the
project’s performance and success. This works favorably especially when it comes to
projects costs as they can be minimized while the risk is again dealt with accordingly.
This further assures the project client, stakeholders and project team and managers of
success regarding project at hand (Eby, 2022).
 Return on Investment is Increased – Since this process enables the achievement of more
accurate project projections, this ultimately ensures an increase in return on investment.
The risk management techniques enable projects to be successfully completed as per
client’s expectations and within budget, time and required quality (Eby, 2022).
 Communication between teams and Sponsors Improved – Having a well-organized risk
management approach will assist in establishing a practice of proactive communication
about project risks amongst project team and involved players. It will enable project
sponsors, key stakeholders, and other relevant players to become aware of new project
information as it becomes available and early response mechanism (Eby, 2022).

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QUESTION 01 : APPLICATION OF THEORY TO CASE STUDY

Benefits of project risk management process

Bp Oil Spill was one massive catastrophe. Its occurrence necessitates an updated and practical
project risk management process which will have results benefiting Bp Oil as an entity. Should
they have prepared an efficient, pragmatic and easy to follow process, the following benefits
would have been achieved by BP Oil :

Increase in Opportunity for Identifying and Avoiding Risks.

The challenge realized by William Reilly was that of BP Oil failing to keep up with the way risks
are assessed and the extent of risk damage should they occur. Having an efficient risk
management process will assist the company in being able to detect potential occurrence of risks
prior or at early stages of occurrence. Kloppernbord et al., (2019) mentions that on complex and
unique projects risks are bound to be present. Hence, thorough time and effort should be spent
more on evaluating risk on critical projects prior to implementation. The very process especially
if well organized to accommodate all potential project risks after thorough evaluation will allow
the BP Oil projects to have it risks better maintained and control. Project risk assessment is very
crucial. A risk management process in a unique and specialized project shall incorporate an easy
to fill, understandable, proactive risk register which will allow occasional checking for progress
or performance to be able to detect potential risks.

Communication between teams and Sponsors can be Improve.

It also appears that communication can play a very significant role in a project team if dome
accordingly. The risk management technique shall incorporate proactive measures to deal with
potential project risks. Furthermore, reaction mechanisms shall be included as well to cater for
early detected risks and how the team is to deal with them effectively. Early detection will
enable effective communication amongst the BP Oil project as to what is about to occur and
measure to be expected in terms of damages. This allows the team to be on the same page and
move o the same pace. Good teamwork can be achieved with the use of a practical process and
risks can be better handled and avoided.

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Return on Investment increment.

Furthermore, since more accurate project projections can be achieved with the use of efficient
risk management process, return on investment can also be increased. BP Oil with just one spill
ended up causing a lot of organization and environmental damage. On the organization, project
deliverables were compromised and as a result the project ended up experiencing failure. The
same goes for the environment as a lot of animals and plants got affected and overall ecosystem
disturbed. As a result, fixing the spill damages costed an arm and a leg.

QUESTION 02 : THEORY

Project Risk Categories

According to Gino et al., (2018), risk identification is a crucial process, and it involves
determining which risks may negatively affect project objectives and success. Furthermore,
should the potential risk occur, the risk identification process evaluates the degree of impact that
could be caused by the occurrence. One of the common ways to identify the sources of risk is
through brainstorming with all relevant and key project players (Gino et al., 2018). In that way,
teamwork, communication, and effective interaction between all project players during risk
management plan can be enhanced. Another key important attribute when identifying potential
risk in a project includes the use of common sense and reasonableness. Historical information
from past projects can be another useful source that can be used to identify possible project risks
(Gino et al., 2018). Another risk identifying approach that could be adopted for assessing risks is
to create a risk category specifically for the project at hand (Gino et al., 2018). A risk category
can simply be defined as a phenomenon that involves grouping of potential sources of risks by
topic and further identify risk that my transpire for each category.

According to Gino et al., (2018), the following are an example of risk categories and their
potential risks :

Technical Category

 Failure to meet customer’s expectations and performance requirement.

 New technology application
 Ability and Inability to meet quality standards and codes.

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Schedule Category

 Supplier delivery delays (material, plant or even equipment)

Cost Category

 Cost escalation more than anticipated (for material, plants etc)

Human Resource Category

 Lack or Availability of people/staff for the project especially skilled/trained staff.

External Categories

 Inclement weather conditions

 Change in Government Regulations
 Change in Consumer Preference
 Local riots, strikes, protesters to delay the project.

Sponsor or Customer Category

 Delay in final approvals

 Funding Security of a Sponsor

QUESTION 02 : APPLICATION OF THEORY TO THE CASE STUDY

According to Bell (2022), the most common factor found in all projects regardless of the size and
industry is risks. After the case study analysis, the following categories with their risks are the
ones that had a great impact towards the BP Oil spill experienced:

Technical Category

Technical risks are the ones associated with technology, performance and quality involved in a
project. When it comes to making sure that project deliverables are fulfilled in accordance with
client’s requirements, and when new technology has to be introduced or updated in order to make
sure organization’s projects are completed with success, all the risks associated with these
situations falls under technical (Bell, 2022). Regarding the case study, we can state that the BP
Oil was involved with technical risks which ultimately contributed to the oil spill catastrophic
events. The examples includes but are not limited to :

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  Failure of BP Oil to meet customer’s expectations by producing the required service or
product in time, with expected quality and cost.
 Failure of BP Oil to perform in accordance with the project requirements.
 New technology (for testing, responding, monitoring, controlling) had to be upgraded for
new potential project risks.
 Failure of BP Oil to meet quality standards and expected codes during execution of the
project or rendering of their service.

Human Resource Category

This category applies to skilled and unskilled personnel requirements. But for unique projects
such as BP Oil project, there is a great need to have enough skilled human resources to undertake
proactively such high-risk projects. All possible risks linked to the possibility that the project
team may not have the required skills, knowledge, or expertise to complete the project fall under
the human resource category. According to the case study, Professor N. Levenson argued that the
damage that had transpired in BP Oil project can be the result of incompetency in human
resources (people) than in systems (software). Example of human resource risks includes but is
not limited to :

 Unavailability of skilled human resource (people)

 Unavailability of trained labor force

External Category

According to Bell (2022), external risks are the type of risks that exist outside the project’s
organization and beyond the control of the project managers and other relevant teams and players
including politics, government, economy etc. With regards to case study BP Oil, the key risk
associated with external category is the inclement weather conditions that can adversely impact
the project progress since the project is at sea. But other examples of external risks includes :

 Inclement weather conditions could affect the drilling rig (Heavy storm).

Organizational Category

Organizational risks are those risks associated with the organization: the teams, the available
departments, the available divisions etc. that can impact and influence the whole project’s

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successful completion (Bell, 2022). This is the same as technical risks discussed above. With
Regards to the case study BP Oil spill, the risks to look after are :

 Work Culture – poor work culture result into poor productivity and unnecessary mistakes
 Processes used within the organization – how risks are identified, monitored, responded
to, and even avoided is another key problem to evaluate.

QUESTION 03 : THEORY AND APPLICATION OF THEORY TO CASE STUDY

Risk Identification and Management

Preparation of a project risk management process is one of the fundamental factors

distinguishing good project managers from great ones (Roseke, 2021). Risk management is a
process that involves identification, assessment, monitoring, and response to project risks to
minimize the chances of their occurrence and also the impact of the risk towards project
objectives (Gino et al., 2018). In every potential project, once the risks for a have been identified
and assessed, the project team then establishes a mechanism of how each risk shall be handled.
Risk response plan according to Kloppernbord et al., (2019), risk response plan can be defined as
a procedure of establishing options and actions to improve opportunities and to minimize threats
to project objectives. Depending on the severity of the risks identified, the project managers may
decide to develop more than one strategy to settle a single risk. Most importantly, for every
identified risk, the corresponding degree of impact on a project must be estimated and those
could include: project schedule delay, unanticipated additional expenditures, failure to meet
project deliverables, customer declining the new product and as a result requesting damages and
so forth (Gino et al., 2018). One of the key processes during preparation of risk management
mechanism is risk assessment stage. The risk assessment stage plays one of the significant roles
and involves project managers determining the likelihood that the identified risk event will
occur, and the level of impact the very risk event will have on the overall project. Hence, based
on the level of likelihood of occurrence and the degree of impact, the risk can then be put under
priority list or other (Gino et al., 2018).

Risk Response Plan

According to Gino et al., (2018), a risk response plan is defined as a set of possible actions to be
used to prevent and reduce the possibility of risk occurrence and further, the impact it will bring

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on the overall project in case it happened. A well-prepared risk response plan shall include a
triggering event alerting the project managers and other team players. On the other side, the
response plan technique can be to avoid the identified risk, to transfer the identified risk, to
mitigate the risk and accept the risk (Gino et al., 2018). Hence, project managers use risk
assessment matrix as a tool for analyzing and managing risks. It can also be called a risk register
and it includes : What is a potential risk ?, what is the potential impact or the risk ?, what is the
likelihood of occurrence and ultimately what will be the response plan for the very risks ? (Gino
et al., 2018).

The Risk Assessment Matrix : L-low impact on project, M- Medium impact and needs attention
and close monitoring, H-High impact on project progress and reflects red flags and immediate
attention.

Risk Degree of
Risk Likelihood impact
Category The Risk of after Trigging Event Response Plan
occurrence occurrence
(L,M.H) (L,M,H)
External Weather M H Unbalance platform Cease rigging and
(Heavy movement, intensive use of tall
Storm) Unbalanced Shaking equipment mediately
of the equipment
Human Lack of L H Progress Reports Provide necessary
Resource Skilled missing critical data, training, Substitute with
Project Failure to anticipate more capable managers.
Managers potential challenges
prior to occurrence
Human Lack of L M Equipment and Provide necessary
Resource trained Machinery operation training, recruit skilled
labor force failure teams
External Explosion M H Smoke appearance, Cease working and
and Fire thunder-like rapid attend to safe waiting

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 sounds area immediately.
Human Slip and M M Missing employee, Double count
Resource Fall injured employee employees at spot,
Injuries provide first aid on
deck/platform, provide
necessary training
Technical/ Machinery L H Failure of machinery Cease it use, inquire
Organizati and to operate with engineers for
onal Equipment default checks and
Defaults maintenance plans
Technical/ Lack of M H Less or poor Refer to management
Organizati technolog production, failure to with problem report and
onal y reach client possible solution,
enhancem expectations provide training,
ent Develop compatible
software and other
systems
Technical Geological M H Poor production, Regular checks of
Risk rigging equipment,
Geological reports
preparation
Environm Toxic L H Oil Spill Extract and protect
ental Pollutions species, water
Environm Risk to L H Oil Spill Extract and protect
ental animals species, water
and Nature

The above tables show risks associated with BP Oil on their oil rigging project and how
responses can be applied to reduce adverse impacts on project and its success.

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QUESTION 04 : THEORY AND APPLICATION TO CASE STUDY

Project Risk Response Approaches

Risk response plan involves developing an action plan to reduce the likelihood of risk occurrence
and/or the actual impact due to occurrence. According to Gino et al., (2018), risk response plan
can be one of the following approaches :

 To Avoid the risk – this option involves a process whereby the identified risk is basically
avoided by all possible means for example the project plan can allow that specific risky
section or work element to be deleted without compromising the whole project. Effective
communication regarding risks is believed to be very helpful and handy when it comes to
this very approach (Kloppernbord et al., 2019),
 To Mitigate the risk – this is a risk response approach process that involves applying
effort to minimize or lower the risk. This approach aims at reducing both the possibility
of risk occurring and the impact should the identified risk occur (Kloppernbord et al.,
2019).
 Transfer the risk - This risk response approach involves shifting or transferring the
identified risk or part of it to another organization. This can be achieved through the
application of insurance in a project or through project responsibility delegations between
parties or organizations involved.
 To Accept the risk – This is a risk response approach whereby an identified risk’s
occurrence is accepted by the project team. This in most cases is due to the severity of the
risk especially if it’s a minor risk or low-level impact risk. (Kloppernbord et al., 2019).
These are the types of risks that even if they were to occur, they would not have a major
impact on the project’s progress and success measures.

Case Study Identified Risks and Response Approaches for each Risk

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 No Risk Identified Risk Response Approach
.

1 Adverse Weather (Heavy Storm, This risk can be Mitigated. During heavy storms and
Hail) hail, the team need to cease or pause rigging, intense
use of machinery until the platform gains back
balance.
2 Lack of Skilled Project Managers This risk can be Transferred. One thing BP Oil can
do is outsource management of it project to Project
Management Consultants which are better equipped
for high-risk projects.
3 Lack of trained labor force This risk can be Accepted. All new members should
have undergone induction detailing how project
operations work. But BP Oil can always reserve a
budget just for extra training of it medium to lower
staff
4 Explosion and Fire This risk can be Mitigated. Explosions cannot be
totally avoided or ignored since the BP Oil rigging
platform itself comprises of heavy mechanical and
electrical components. But BP Oil shall have a
subsequent plan of extinguishers (special types) and
vacating mechanism to safety.
5 Slip and Fall Injuries This risk can be Avoided. If BP Oil can provide
adequate training for maneuvering around the
platform. Wearing of PPE and its maintenance can
enable avoidance.
6 Machinery and Equipment Defaults This risk can be Mitigated. When it comes to
maintenance, BP Oil needs to reserve a budget to
regularly inspect, service and maintain all machinery
and equipment on a day-weekly basis.
7 Lack of technology enhancement This risk can be Mitigated and Avoided. Program

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 and System updates can be done at the beginning of
every financial year or after six months to a year.
Developments again can be done once in 1-2 years to
improve productivity
8 Geological Risk This risk can be Avoided. Every time a new rig needs
to be done. Competent geologists and engineers need
to prepare all necessary inspections prior to the actual
rigging process. The result needs to be evaluated and
discussed with the project team and potential
solutions can be discussed and agreed upon.
9 Toxic Pollutions This risk can be Mitigated through regularly
servicing and maintaining of all machinery and
rigging equipment to avoid possible spills and leaks
10 Risk to animals and Nature This risk can be Mitigated through regularly
servicing and maintaining of all machinery and
rigging equipment to avoid possible spills and leaks

CONCLUSION

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The significance of preparing a risk management plan for each and every project involved in an
organization can never be emphasized enough. According to Roseke (2021), the preparation of
the risk management process is one of the key factors separating good project managers and
great ones. In the body of this assessment, literature has revealed that one of the key benefits of
adopting a risk management process for your project is that project projections are more
accurately achieved of which serves good both the client and service provider’s goals. Hence,
this process becomes a necessity for the successful achievement of project goals and
deliverables. It is also a great project manager’s responsibility to make sure that risk is
categorized accordingly in order to be able to prepare an effective and efficient risk response
plan or risk register. This will further help in deciding which approach will best suit the risk
based on its category and severity. During preparation or risk assessment, it is of ultimate
importance that project managers to get logical when it comes to weighing levels of risk impact
and occurrence. For BP Oil, it is of ultimate importance to thoroughly do risk assessment since
the organizations deals with very high risks projects. The human resources, if correctly recruited,
can greatly assist in anticipated production and effective project management. Also, technology
with regards to software, programs development etc needs to be prioritized as it can assist greatly
in identifying potential project threats prior to their occurrence. Training and machinery
servicing and maintenance are also a very crucial factors that BP Oil need to reserve budgets for
each and every financial year.

REFERENCES

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