The application of IOR techniques is one of the investment opportunities open to Exploration and Production companies. A project will only go forward if the perceived balance between the rewards and the risks is acceptable. IOR projects may be ruled out because they are considered to involve significantly higher risks than conventional developments. Therefore, some means of evaluating the actual level of risk may be required if the full economic benefits from IOR techniques are to be realised.

Risk assessment is a key element in safety cases, where a well-established methodology for quantifying risk exists. This paper discusses the extension of these methods to IOR project risk assessment. Combining reservoir and IOR technique uncertainties with their impact on project performance allows project risk to be better quantified. The results of the risk assessment are presented in terms of a "risk-reward" diagram that plots the probability surface for possible project outcomes as a function of NPV (reward) and exposure (risk).

The outcome of a risk assessment can be used proactively to mauage risk by identifying actions to reduce the probability of project outcomes with low NPV and high exposure. Risk management strategies are identified, including improved project design, key data acquisition and contingency planning. It is argued that IOR projects should be optimised by considering economic and risk factors together.

A generic polymer project is used to illustrate the application of risk assessment and risk management techniques. A superficially attractive unrisked project is shown to be unacceptable when a risk assessment is performed However, by applying risk management and changing the project design appropriately, it is possible to achieve significant risk reduction with little loss in economic performance, compared to the unrisked base case project.

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