The Cost of producing a barrel of oil depends on a variety of factors related to the inherent costs (direct and indirect) associated with oil field exploration, development, exploitation and lifecycle extension up to oil field decommissioning. Yet there are also other variables that enter this already complex equation and contribute to determine the final oil price.
Like any other industry, in the oil and gas business, accidents, have negative impacts on operational and financial performances, since they can adversely affect the production process and require proper restoring interventions.
Whenever people are injured, assets damaged, the environment polluted and business interrupted, money is unavoidably lost and company image and reputation is compromised. It is not easy to estimate the nature and extent of such losses and translate this estimate in a defined algorithm. However, different components can be evaluated through quantitative and qualitative methodologies.
Moving from these considerations, this paper presents a methodology aimed at evaluating the so called "Cost of the risk" of a Barrel of oil that takes into account the following elements:
Process Safety Risk Costs: to face the impact on people due to process Major accidents
Occupational Risk Costs: to face occupational safety hazardous events
Environmental Risk Costs: to address the impact on the environment due to a Blow out event or pipeline ruptures
Asset Risk Costs: to manage the financial impact on the Asset due to process Major accidents
Reputational risks costs: to manage potential impacts on reputation and negative perception of the public of the company