Detailed review of:

Risk Management with Applications from the Off-shore Petroleum Industry

The book consists of 8 chapters as follows:

This book comes from authors who are professors at the University of Stavanger, Norway and have rich experience of researching and offering consultancy in the area of risk analysis and management, particularly with reference to off-shore oil and gas industry. The authors clarify in their preface that this book is about making decisions in the face of risks and uncertainties and they outline the challenges that go with this process of decision making. In the first chapter, the authors discuss in detail the fundamentals of risk management and nature and extent of problems associated with development of

off-shore oil and gas activity in the Norwegian continental shelf of North Sea. In the second chapter which is the lengthiest of all chapters, the principles of risk management are discussed starting with the definition of risk and various approaches for risk assessment. It also elaborates the use of expected values and portfolio theory for use in decision making after discussing cautionary and precautionary principles. This chapter also discusses the risk acceptance criteria and the process of making decision under uncertainties along with ethical aspect of risk acceptance criteria. The authors also provide a structure for risk analysis and decision making involving stakeholders without the use risk acceptance criteria. All these discussions centre around the application the concepts and methodologies to off-shore gas and oil industry, in fact more discretely in chapters 5-7. In the last chapter, the authors elaborate the success factors that help make a realistic application of concepts, analysis and management that have been discussed in earlier chapters of the book. Appendices provide the introductory material to what is presented in the book. Particularly, the Appendix B on ALARP is quite interesting and instructive.

In the opinion of the reviewer, this book has come around successfully in presenting its theme, theories and applications of risk management, more so to an off-shore gas and oil industry and would like to recommend to all risk analysts and managers. This book would also be found useful by the students and teachers at universities in pursuing or teaching a risk management course.

Krishna B. Misra

Review published in the International Journal of Performability Engineering, Vol. 4, No. 3, July 2008, p. 299.