Risk response techniques employed currently for major projects

Abstract

Risk management is fundamental to the success of a major project. However, the variations in using risk management practices are considerable and are dependent on numerous factors such as the industry sector, the size of the project, and the stage in the project life cycle. One of the major constituents of successful risk control is the use of risk response. This paper concentrates on the choice and use of the most successful risk response techniques within the oil and gas industry and compares them with the use of those chosen by the construction industry. Results were ascertained through a survey of over one hundred companies within these two sectors by use of an extensive questionnaire. The main conclusions are that risk reduction as a response to assessed risks is most commonly used by both sectors; and that the construction industry concentrates almost exclusively on reduction of financial risk. It is proposed that the construction industry can benefit greatly from the more experienced oil and gas industry in managing technical risk which, with the advent of private funding, is likely to become a more predominant part of construction procurement.