Risk Management Plan for Shell Australia: Identification, Analysis, and Treatment of Risks

RISK
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
RISK MANAGEMENT PLAN.......................................................................................................1
Context and Scope of Plan..........................................................................................................1
Identification of Risks.................................................................................................................1
Analysis of Risks.........................................................................................................................3
Planning and Documentation of Risk Management Treatments.................................................6
Implementation of Monitoring and Evaluation Processes........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Risk Management is an appropriate area of practice which is associated with ensuring
management of several types of risks, which could cause certain fatalities and disadvantages to
the companies. Furthermore, it is very crucial for the firm to control the same in order to assure
consistent working and safety of the employees as well as the people (Cruden, 2017). In relation
to this, the report below is based on risk assessment and management within Shell Australia,
which is one of the most recognised fuel companies within the country and globally. Hence, the
report covers the probable risk areas associated with the company, along with its effective
analysis, contingency planning and monitoring.
RISK MANAGEMENT PLAN
Context and Scope of Plan
The very first aspect which is required to be undertaken by the company in relation to its
risk management plan is related to determining the scope upon which the plan would be
implemented. This would allow in analysing the applicability of the plan on different
departments and functions of the organisation.
Shell Australia is the subsidiary of Royal Dutch Shell, which is associated with dealing in
storage and distribution terminals, oil refineries, and service stations for transportations and
storage of oils. Moreover, it also operates in exploration of oil, coal and petrochemical mining.
However, there are several areas where the plan would be implemented within the company. One
such area is its distribution function, as it has been prone to several risks related to transport
inefficiencies. Furthermore, another aspect is associated with the operations of the firm, which is
related to risks associated with inefficiencies of equipments and processes, as well as certain
practices. Hence, the scope of the plan would be quite wide as it would be covering prominent
areas of functioning within the company that are necessary to be able to perform at their highest
efficiencies.
Identification of Risks
This step within the risk management plan is related to identification of several risk areas
that is required by the company to look into in relation to identify the consequences of these
risks, departments they might affect and extent to which they are severe.
 Operational Discontinuity:
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In this relation, one prominent area is associated with oil spills, which causes operational
discontinuity. Quite recently, the firm was subjected to major oil spill within the Gulf of Mexico,
which resulted in almost 2,000 barrels of oil that spilled within the sea (Shell working to repair
leak that spilled 2,000 barrels of oil into Gulf of Mexico, 2019). Such risk has been always and
constantly been high with the context of organisation which has caused problems such as
environmental contamination, illnesses amongst the employees and fatalities to marine creatures.
 Accidents:
Another type of risk area is associated with accidents. The equipments and processes
used by the organisation are very much inappropriate, hence, causing ineffectiveness in handling
operations. One such prominent example associated with the same is that recently, two of Shell's
employees died during routine testing of lifeboat launch, along with several retrieval capabilities
(Shell Says Two Killed in GoM Platform Accident, 2019). This reflects that the operational
capacities of the firm are very weak. Secondly, such accidents causes fatalities as well as
ineffectiveness in functioning of several equipments, which in this case was the safety
equipments for product testing.
 Innovation:
This risk area is associated with regular modification and alteration of existing resources
and offerings in order to appropriately enhance their importance effectively. Moreover,
innovation is one of the most required aspects within the existing business environment. In
relation to this, Shell Australia is currently working on the digitalisation of its oil and gas
businesses, which would help in mapping the extractions, effective organisation of the same,
along with assisting the firm in ensuring optimisation in field recovery operations (Digitization
in Oil & Gas – is Shell a Leader or a Laggard?, 2019). However, there are several risks that are
associated with the same, such as inappropriate results due to technological failure, non-
compliance of employees, ineffective technological infrastructure and so forth. However, these
risks would be causing inappropriate implementation of innovation within the company and is
highly crucial to be understood by the company, so that the firm overcomes this area
appropriately.
 Environmental Impact Issues:
One of the most prominent risk areas of the company is related to the environment. The
practices of the organisation in relation to exploration of fuel, its shipment and transformation
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