Managing operational risks along the oil supply chain

TLDR

Operational risk in the oil industry can cause environmental disasters and loss of life, yet its link to supply‑chain management remains underexplored. The study proposes an Eni‑derived model to assess operational risk across drilling, transport, and refining stages of the oil supply chain. The model delineates three drilling sub‑methods for design, construction, and production; two transport risk‑management processes for general operations and pipeline failures; and a refining phase that prioritises equipment and applies various techniques and tools.

Abstract

Operational risk in the oil industry may lead to environmental disasters and to heavy loss of human lives. However, the relationship between operational risk and oil supply chain management is poorly studied. This article proposes a model (derived from the Eni's supply chain) to analyse and to assess the operational risk at the drilling, primary transport and refining stage of the oil supply chain. For the drilling stage, the model suggests three sub-methods, one for each period of the plant life cycle (design, construction and production). For the primary transport stage, two different risk management processes are proposed: the former one allows the risks resulting from processes, procedures and physical components (other than oil-pipelines) to be identified, assessed and controlled, whereas the latter one allows risks arising from the pipeline breakdowns to be faced. Finally, for the refining stage, a preliminary phase is recommended to prioritise each equipment of the refinery, and several techniques and tools are suggested.