Risk ManagementIntroduction

Course Pre-requisite

Engineering System

Risk

2

Engineering Statistics

System Reliability

Engineering

Risk Management

Course Topics

Introduction

Risk Assessment Concepts

Risk Assessment Methodology

Hazard Identification

Frequency Modeling Frequency Modeling

Consequence Modeling

Risk Acceptance

Risk Mitigation

Risk Management

Case Studies

3

Course Materials/References

1. Textbook Penilaian Risiko Pipa Gas Bawah Laut

2. Standards, particularly:

1. DNV-RP-F107 (Risk Assessment of Pipeline Protection)

2. DNV-OS-F101 (Submarine Pipeline Design and

Construction)

API 581 (Risk Based Inspection)3. API 581 (Risk Based Inspection)

4. ASME B 38.1 (Gas Transmission & Distribution Piping

Systems)

5. ABS guidelines in risk assessment

3. Related Papers and Journals

4. Course Handouts

4

References

5

Course methods

Lectures

Group discussions and presentations

Paper-based examination

Homework and case study Homework and case study

6

Course evaluation

Final examination : 30%

Midterm examination : 30%

Assignment 1/Quiz1 : 20%

Assignment 2/Quiz 2 :20%

Weekly attendance : 0%Weekly attendance : 0%

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8

Risk is a curious and complex concept. In a sense it is

unreal in that it is always concerned with future, with

possibilities, with what has not yet happenedpossibilities, with what has not yet happened

Elms (1992)

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Definitions

Risk

A measure of the potential for loss in terms of both the

likelihood (events/year) of the incident and the

consequences (effects/event) of the incident

Risk Analysis

Systematic use of available information to identify hazards

and to estimate the risk to individuals, property, and the

environment (IEC 60300-3-9,1995)

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A risk analysis is always a proactive approach in the sense that it

deals exclusively with potential accidents. This is opposed to

accident investigation, which is a reactive approach that seeks

to determine the causes and circumstances of accidents that

have already happened.

Risk analysis three main questions

A risk analysis is carried out to provide answers to

the following three main questions (Kaplan and

Garrick, 1981 ):

Q 1. What can go wrong?

To answer this question, we must identify the To answer this question, we must identify the

possible hazardous events that may lead to harm to

some assets that we want to keep and protect.

These assets may be people, animals, the

environment, buildings, technical installations,

infrastructure, cultural heritage, our reputation,

information, data, and many more.

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Risk analysis three main questions

Q2. What is the likelihood of that happening!

The answer can be given as a qualitative statement or as

probabilities or frequencies. We consider the hazardous events

that were identified in Q 1, one by one.

To determine their likelihood, we often have to carry out a

causal analysis to identify the basic causes (hazards or threats) causal analysis to identify the basic causes (hazards or threats)

that may lead to the hazardous event.

Q3. What are the consequences?

For each hazardous event, we must identify the potential harm

or adverse consequences to the assets mentioned in Q I.

Most systems have barriers that are installed to prevent or

mitigate harm. The harm to the assets is dependent on

whether or not these barriers function when the hazardous

event takes place.12

Risk analysis three main steps

Hazard identification. In this step, the hazards and threats related to the system are identified together with the potential hazardous events. As part of this process, assets that may be harmed are also identified.

Frequency analysis. This step will usually involve a deductive analysis to identify the causes of each hazardous event and to estimate the frequency of the hazardous event and to estimate the frequency of the hazardous event based on experience data and/or expert judgments.

Consequence analysis. Here, an inductive analysis is carried out to identify all potential sequences of events that can emerge from the hazardous event. The objective of the inductive analysis is usually to identify all potential end consequences and also their probability of occurrence.

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Qualitative Quantitative risk analysis

Qualitative risk analysis: A risk analysis where probabilities and consequences are determined purely qualitatively.

Quantitative risk analysis (QRA): A risk analysis that provides numerical estimates for probabilities and/or consequences-sometimes along with associated uncertainties.uncertainties.

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Definitions

Risk Evaluation

Process in which judgments are made on the

tolerability of the risk on the basis of a risk

analysis and taking into account factors such as

socioeconomic and environmental aspects (IEC socioeconomic and environmental aspects (IEC

60300-3-9, 1995).

Risk assessment

Overall process of risk analysis and risk evaluation

(IEC 60300-3-9, 1995).

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DefinitionsRisk Management

A continuous management process with the objective to identify, analyze, and assess potential hazards in a system or related to an activity, and to identify and introduce risk control measures to eliminate or reduce potential harms to people, the environment, or other assets.

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Risk analysis, assessment, management processes

Risk

Analysis

Risk

Assessment

17

Risk

Management

Risk representation

< 10-6

10-4 - 10

-610

-2 - 10

-410

-1 - 10

-2>10

-1

Could occur but

very doubtful

(almost impossible)

Could occur but

doubtful

Might occur at

some time in the

future

Will probably occur Is expected to occur

in most circum-stances

Has occurred in

E&P industry

Has never occurred

in VICO

Has occurred in

VICO

Has Occurred several

times in VICO

Happens several times

per year in a location

People/Health Production/Assets Environment Reputation E D C B A

Very short term health

effect/injury

(First Aid case)

Minor or negligible

disruption, easily

recovered or

replaced or

< $10 K

Any spill inside secondary containment

Uncontained oil or chemical spill 1 MMSCF, or

> 100 BBLS, or

> $10 K

Uncontained oil or chemical spill (10L

- 1bbl) retained on VICO property

Requires liquid oil recovery efforts

(absorbent)

Exposure in Badak area

LMI4 23 21 18 14 10

18

(absorbent)

Remediation/clean-up cost 10 MMSCF, or

> 1000 BBLS, or

> $100 K

Uncontained oil or chemical spill (1bbl -

15bbls) retained on VICO property

Uncontained spill outside boundary with

minor off-site impact

Remediation/clean-up cost $10K

$100K.

Regional newspaper

exposure (KALTIM)

IIT

Public claim for damage3 20 17 13 9 6

Permanent debilitating injury o>100 MMSCF, or

> 10,000 BBLS, or

> $1 MM

Any oil or chemical spill 15bbls 50 bbls

Any spill on water, clean up only using

internal resources

Remediation/clean-up cost > $100 K.

Requires immediate statutory reporting*

Oversight from environmental authority

National newspaper

exposure

BOI

Legal class action

from NGO/community

2 16 12 8 5 3

Fatality >1000 MMSCF

>100,000 BBLS

> $10 MM

Any oil or chemical spill > 50 bbls

Any spill, clean up requiring assistance

outside VICO

Remediation/clean-up cost

> $1 MM

Community evacuation.

Environmental law violations

International Exposure

Other significant

community impact.

Government/ criminal

investigation

1 11 X 4 2 1

Risk representationRisk Matrix According to DNV-RP-F107

1 2 3 4 5

VERY LOW LOW MODERATE HIGH MAJOR

5

FR

EQ

UE

NT

4

PR

OB

AB

LE

3

OC

CA

SIO

NA

L

CONSEQUENCE RANKING

FR

EQ

UE

NC

Y R

AN

KIN

G

Frequency Ranking According to DNV-RP-F107

Consequence Ranking According to DNV-RP-F107

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3

OC

CA

SIO

NA

L

2

RE

MO

TE

1

IMP

RO

BA

BL

E

FR

EQ

UE

NC

Y R

AN

KIN

G

Not Acceptable

ALARP Region

Acceptable

D

Denting/Diameter

20