Asset management: A risk based approach

Executive summary

Organizations in the Energy & Resources industry are typically asset-intensive. Their daily operations depend strongly on the performance of their physical assets. As a result, these organizations strive continuously to optimize their asset performance. At the same time, they are frequently faced with aging assets, along with environmental, safety and regulatory compliancy requirements that are becoming more and more stringent, adverse weather conditions and environmental threats, emerging technologies and other challenges associated with asset ownership and operation. To add to this, there is the ongoing pressure to reduce costs in combination with shrinking budgets. This gives Asset Managers the huge challenge of allocating their scarce budget in the most optimal way to their assets.

The emerging discipline of a risk-based approach to managing assets has increased significantly in the last decade. Risk-based asset management has shown to be effective for asset-intensive systems, not necessarily by reducing risk, but by using risk to balance the operational performance of the assets against the asset life-cycle cost. Expenditure on assets is rationalized by using an assessment of what risk exposure is acceptable by the different stakeholders, maximizing overall wealth for the organization and society. For this reason, risk management has been widely incorporated into industry best practice for asset management, such as the ISO55000 series of standards.

The results of this survey will allow energy and resources companies to benchmark and assess their current ARM activities against industry best practice, and learn about emerging trends for risk management in the industry.