Ophir Energy plc Annual Report and Accounts 2011
Ophir Energy plc Annual Report and Accounts 2011
Ophir Energy plc Annual Report and Accounts 2011
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
26<br />
<strong>Ophir</strong> <strong>Energy</strong> <strong>plc</strong> <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong><br />
Principal risks <strong>and</strong> uncertainties<br />
Risk management<br />
<strong>Ophir</strong> operates in the inherently risky upstream oil<br />
<strong>and</strong> gas sector <strong>and</strong> effective risk management is an<br />
essential process for the Group to deliver its strategic<br />
<strong>and</strong> operational objectives.<br />
<strong>Ophir</strong> is committed to maintaining<br />
a balanced portfolio <strong>and</strong> to<br />
managing risks in a proactive <strong>and</strong><br />
effective manner. The key elements<br />
<strong>Ophir</strong> risk management<br />
processes are:<br />
––<br />
Risk assessment<br />
––<br />
Risk analysis <strong>and</strong> evaluation<br />
––<br />
Risk mitigations<br />
––<br />
Risk monitoring <strong>and</strong> reviewing<br />
––<br />
Communication <strong>and</strong> consultation<br />
Responsibility for identifying <strong>and</strong><br />
managing risks lies with <strong>Ophir</strong>’s<br />
Executive Directors, Senior<br />
Management Team <strong>and</strong> Country<br />
Managers. The Executive Directors<br />
continually monitor the Group’s<br />
risk exposures <strong>and</strong> report to the<br />
Audit Committee <strong>and</strong> Board of<br />
Directors on a six monthly basis, or<br />
more frequently as required.<br />
The principal risks of the Group are<br />
summarised as follows:<br />
Type Risk Mitigants<br />
Strategic Political risk – The Group maintains a balanced asset portfolio across different jurisdictions<br />
in a region where the Group is most accustomed to operating.<br />
––<br />
The Group strives continually to maintain positive relationships in all host<br />
countries that it operates. <strong>Ophir</strong> aims to work to the highest industry<br />
st<strong>and</strong>ards with all regulators <strong>and</strong> compliance with the Company’s licence<br />
<strong>and</strong> PSC obligations is closely monitored.<br />
Reliance on<br />
key personnel<br />
Investment<br />
decisions<br />
––<br />
<strong>Ophir</strong> is reliant on a small team of experienced oil <strong>and</strong> gas professionals<br />
for its operational success. In order to retain, motivate <strong>and</strong> recruit suitably<br />
qualified employees it ensures its remuneration packages are competitive.<br />
It has established a long- term incentive programme for executives <strong>and</strong><br />
deferred share plan for staff.<br />
––<br />
The Group <strong>and</strong> its advisors are experienced within the industry in which it<br />
operates <strong>and</strong> complete a proper review against the Group’s strategy <strong>and</strong><br />
investment criteria. Full due diligence is undertaken upon all potential<br />
new entries. The current portfolio is closely monitored.<br />
Type Risk Mitigants<br />
Operational<br />
Drilling<br />
operations risk<br />
––<br />
The Group maintains clearly defined operational procedures that should<br />
always be followed.<br />
––<br />
The contracting <strong>and</strong> procurement process ensures suitably qualified<br />
contractors are employed.<br />
––<br />
Regular training in the processes <strong>and</strong> continual monitoring of adherence<br />
are undertaken.
Change language