Project Risk Management: Essential Methods for Project Teams and Decision Makers

Preface

THAT WAS THE DAY—when a grandiose multibillion-dollar mega-project that I had recently joined was pronounced dead. It had drilling pads, processing facilities, an upgrader, pipelines, roads, camps, and an airfield in its scope. It turned out that several critical risks were not properly addressed, which made uncertainty of the project outcome unacceptably high. As a result of a decision gate review, a few-million-dollar de-risking project was announced instead to prove core in situ technologies standing behind the project and address some other critical risks stemming from the key project assumptions.

“The King is dead, long live risk management!”

This was a pivotal point in my ongoing interest in project risk management, one that defined my career path for many years ahead.

There were two valuable lessons learned related to that project. First, despite the fact that the majority of the project team members were high-level specialists in project management, engineering, procurement, construction, project services, stakeholder relations, safety, environment, and so on, they were not comfortable enough in selection and application of project risk management methods. Second, even though decision makers at the divisional and corporate levels had tons of project development experience, they did not pay due attention to some particular categories of uncertainties. In both cases, the situation was exacerbated by manifestations of bias based on a degree of overconfidence and desire ...