Oil cos take on risk

International

National oil companies are taking a larger slice of the energy pie - and with that a larger share of risk - with an estimated 75%-80% of the world’s known oil reserves in the hands of national governments. Speaking at the Marsh National Oil Company conference in Dubai recently, Brian Storms, chairman and chief executive of Marsh, said there is a “new world” view of risk where risks and potential liabilities can be turned into competitive advantage over companies that fail to address such risks. “Frankly, insurable risks, while frequently complex, are the easiest to plan for. Uninsurable risks -climate change, for example - require far more foresight and creative solutions,” Mr Storms said. A Marsh energy client undertook a comprehensive risk assessment and found that the impact of climate change posed massive exposures. “With many facilities situated either on areas of permafrost or in proximity to the arctic ice shelf, a potential thawing induced by climate change would present significant new risk,” Mr Storms said. Clients also need to monitor more traditional risks such as terrorist acts and natural disasters that impact on production, and the concentration of supply chains especially due to the threat of avian flu, Marsh said.