Addressing Political Risk in the Oil and Gas Sector

Introduction:

Political risk analysis is crucial in the oil and gas sector due to the significant impact of political uncertainties on operations. According to McKinsey, up to 70% of earnings can be at risk due to political factors. This specialized training course is designed to equip participants with the skills to evaluate and manage political risks in the oil and gas industry. It covers the evolution of political risk management processes, risk assessment, response strategies, and mitigation techniques. Participants will learn to handle political risks effectively to protect project success and investment value.

Objectives:

By the end of this training course, participants will be able to:

• Investigate contemporary factors influencing political risk.
• Analyze and mitigate political risks in the oil and gas sector.
• Develop effective, tailored solutions for political risk management.
• Expand their toolkit and methods for managing political risk.
• Propose innovative approaches and models for managing political risk.
• Foster synergies between internal and external stakeholders for effective risk management.

Training Methodology:

• Lectures
• Case studies
• Group discussions
• Simulations
• Workshops
• Risk assessment exercises
• Scenario analysis

Course Outline:

Unit 1: Introduction to Political Risk

• Definition of political risk
• Ethical issues in political risk management
• Governance and compliance considerations
• Transparency and accountability

Unit 2: Political Risk: Threats and Opportunities

• World events and their implications
• Geopolitical risk in the oil and gas industry
• Climate change impacts
• Technological factors
• Industry outlook
• Turning threats into opportunities

Unit 3: Sources of Political Risk

• Government policy implications
• Conflict zones and their impacts
• Political transformations and social changes
• Issues related to ethnic and minority groups
• Economic factors and black swan events

Unit 4: Sources of Information and Analysis

• Interacting with governmental agencies
• Analyzing political actors’ roles
• Media and publication reviews
• Contributions from academic studies and civil society
• Consulting companies and intelligence resources

Unit 5: Assessing Political Risk

• Assessment strategies and profiling tools
• Integrating disparate data
• Working with incomplete information
• Comprehensive risk views
• Expert insights and scenario analysis

Unit 6: Red Flags and Show Stoppers

• Identifying critical warning indicators
• Examining critical deal-breaking issues
• Continuous political environment tracking

Unit 7: Capturing and Communicating Political Risk

• Reporting strategies
• Risk matrix application
• Risk measurement criteria
• Executive-level communication skills

Unit 8: Overcoming Political Risk

• Political risk management techniques
• Identifying controllable, influencable, and ignorable factors
• Choosing suitable management skills
• Following developments and feedback

Unit 9: Building Political Capital

• Developing relationships and trust early on
• Integrating projects into state agendas
• Proactive risk management strategies
• Stakeholder management and consultation
• Leadership team involvement and collaboration

Unit 10: Building Scenarios

• Policy practices in scenario planning
• Setting objectives and defining boundaries
• Predictive and anticipatory approaches
• Generating and describing scenarios
• Rating scenarios by likelihood and impact

Unit 11: Using Scenarios

• Managing uncertainty
• Contingency planning
• Recognizing potential within scenarios
• Addressing rare but high-impact events