Energy firms in the Middle East energy market are highly adept at responding to the ever-evolving risk landscape they face and have an above-average approach to risk management, relative to their global peer group, according to research published today by Marsh.
The first analysis of its kind, Marsh’s Risk Management Research, Benchmarking the Middle East Onshore Energy Industry, gauges the comparative risk quality of Middle Eastern oil, gas, and petrochemical facilities to more than 500 similar facilities worldwide. According to Marsh’s research, hardware is a key strength in the Middle East, due to land availability, substantial capital investment and the development of modern facilities.
Speaking on the eve of Marsh’s bi-annual National Oil Companies (NOC) conference taking place in Dubai, Andrew George, Chairman of Marsh’s Global Energy Practice, commented: “The Middle East is playing an increasingly critical role in world energy production. Significant investment in the region and expanding facilities necessitate that the industry fully understands and addresses the unique landscape of risks involved.
“The relative performance of the region in its approach to hardware, in particular remote isolation and flare design, demonstrates that companies are persisting in their efforts towards creating safer installations, improving loss prevention and driving operational excellence.”
Marsh’s research identifies key areas for improvement, including software and emergency control systems, which determine the overall risk quality of the region. In particular, Marsh reports that significant improvement can be achieved in the management of change (MoC), the industrial practice of changing processes and systems without introducing new hazards or exacerbating existing hazards.
Mr George continued: “Despite facing an increasing number of challenges and a complex risk landscape, Middle East energy firms are embracing several improvement opportunities and significant risk reduction is evident, as they intensify their focus on loss prevention and operational excellence. These improvements will be reflected in future benchmarking scores.
“Improving risk quality has advantages for both clients and underwriters. High-quality risks tend to produce fewer losses and are more attractive to underwriters, generally resulting in better rates and capacity in the insurance market.”
Marsh’s NOC conference takes place under the patronage of His Highness Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai. The Twitter hashtag for the conference is #MarshNOC; special reports and updates are available from the conference’s website.
Tuesday, March 18- 2014 @ 15:38 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.