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Oil companies in dark about risk: Report


NEW YORK— Most national oil companies are in the dark about the risks they face and how to manage them, a recently released report reveals.

Marsh Inc. found that less than 10% of the executives with national oil companies that it surveyed feel strongly that they have a full understanding of their risks. The brokerage gathered much of the data from a forum it sponsored in Dubai earlier this year with around 250 attendees who represented national oil companies, governments and academia.

"While NOCs recognize the need for appropriate levels of protection against potential losses," the report states, "they overwhelmingly acknowledged an inability, at present, to fully assess the total scope of their risks and proactively mitigate losses through advanced risk management."

The study also revealed which risks NOCs are most worried about. When asked to assess the relative importance of a number of risks, the oil companies identified the top five as:

—Availability of oil and gas reserves.

—Recruitment and retention of qualified workforce.

—Political/regulatory risk issues.

—Environmental impact of operations.

—Obsolescence of infrastructure.

Brian Storms, chairman and chief executive officer of Marsh, said in a statement that, "not long ago, the top concern for an NOC might have been a fire at a refinery." The study shows, though, that "newer risks" are "moving near the top of the list."