Case Study: Risk Management, Mitigation, and Recovery in PETROLEOS

This case study provides a detailed analysis of risk management strategies within the context of the PETROLEOS project, focusing on the challenges faced by INGEPP. It identifies key risks during the tendering and execution periods, including poor project scheduling, delayed basic engineering, lack of experience with new technologies, and insufficient lead-time. The study outlines potential risk mitigation actions such as early risk identification, improved communication, risk prioritization, and the development of contingency plans. It also addresses the consequences of failing to manage these risks, such as financial constraints and project delays. Recommendations for INGEPP's top management include maintaining project schedules, implementing a risk analysis plan, and developing a comprehensive project plan. Furthermore, the analysis emphasizes the importance of using a risk matrix for better visibility and decision-making. The case concludes with a discussion on margin recovery and the potential consequences of bankruptcy, highlighting the critical need for effective risk management in large-scale projects. Desklib provides more solved assignments and past papers for students.

Risk Management 1
Risk Management
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Table of Contents
Tendering period........................................................................................................................3
Risk Analysis..........................................................................................................................3
Risk mitigation actions...........................................................................................................3
Execution period........................................................................................................................4
Risks occurrence.....................................................................................................................4
Risk management...................................................................................................................4
Learning and Recommendation.................................................................................................5
Margin recovery & rescue plan..................................................................................................5
Bibliography...............................................................................................................................7

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Tendering period
Risk Analysis
Some of the primary risks identified by INGEPP at the time of tending include the
following: Firstly, according to the case study, the behaviour of INGEPP failure to
stick to its original project schedule place it is a compromising situation. As a
result, due to INGEPP inability to stick to its original project schedule indicate
that it had poor planning which could only amount to chaos in the course of the
project (Gomart, 2017, p. 2). Thirdly, the Basic Engineering instigated a month
later which could definitely interfere with the running of the project. Fourth,
INGEPP is awarded the tender but this was its first industrial construction with the
latest up-to-date technology for generating hydrogen which means that it was not
well-experienced in the use of this technology (Gomart, 2017, p. 2). Another risk
analysis facing INGEPP is insufficient lead-time and selecting an inappropriate
procurement strategy since the initial project margin forecast for INGEPP was
seen to be excellent. However, one and a half months later the project had turned
into a nightmare.
Risk mitigation actions
The risk mitigation action that INGEPP could have taken into consideration
include:
Early identification of the project risks by brainstorming on the potential risks,
reviewing the lists of all the probable sources of risks and the project team’s
knowledge and experience on how to hand these risks (Kerzner, and Kerzner,
2017).
Communicate about the risks. INGEPP could have paid close attention to the
project risks and communicate it to the project owner and ask for a meeting to

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make sure that both the project team and the owner perceive that risks
management is essential for this project.
Prioritise the risks associated with the project. Therefore, INGEPP should have
spent some time on the risks which could cause the greatest loss or gain to the
project (Verner et al., 2014, p. 54).
Develop responses to the risks: In this case, INGEPP should have come up with a
risks response plan. This give additional value to the project since it prevents the
occurrence of threats and reduce the negative effects to the project.
Develop a contingency plan for project risks: INGEPP should have developed a
contingency plan which could have been put into action in the case of risk
occurrence as it minimises the need to manage the risks by crisis.
Execution period
Risks occurrence
Some of the risks that indeed occurred include lac of enough resources results in
the INGEPP VP Finance facing a lot of stress due to experiencing financial
constraints. Similarly, INGEPP failure to adhere to its original project schedule
leads to it asking for forgiveness for being late in its project schedule.
Risk management
In order for INGEPP to minimise the project risks it could have used the following
risks management process:
INGEPP could have ensured that each project members is involved in planning on
how to identify and understand risks related to the project.
Ask each project member to provide a list of risks they view can result from the
project and then consolidate the list to remove the duplications (Zhang, and Fan,

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2014, p. 412). Evaluating the possibility and impact of the risks associated with
the project using a matrix.
Learning and Recommendation
In regard to PETROLEOS case, I would have recommended the following to
INGEPP top management:
It is important that the INGEPP top management to have maintained its original
project schedule since scheduling outlines the project timelines, availability of
resources and delivery (Pritchard, and PMP, 2014).
There is need for INGEPP have a risks analysis plan in place because it help to
prepare the project manager to foresee risks related to the project and be able to
estimate the impact.
The management need to ensure that it have a risk management plan, which help
to ensure risks have been minimised.
INGEPP should have developed a project plan to help it understand its current
position and where it is heading to and how it has to get there.
Providing information prior to the project schedule (Larson, and Gray, 2015).
INGEPP should have ensured that it has all information from IMP so that to be
able to conduct the project in a safe, on schedule and according to the standards.
The top management for INGEPP should observe time in project delivery because
products are supposed to be delivered on time
The project team should use a risk matrix to describe the project risk level.
Accordingly, this is a significant mechanism which increases the visibility of risks
and aid in management decision making.
Margin recovery & rescue plan

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The disadvantage associated with INGEPP being threatened to filling bankruptcy
is that it could lead to collapse.

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Bibliography
Gomart, B., 2017. The PETROLEOS Case. pp. 1-6.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to
planning, scheduling, and controlling. John Wiley & Sons.
Larson, E.W. and Gray, C.F., 2015. A Guide to the Project Management Body of
Knowledge: PMBOK (®) Guide. Project Management Institute.
Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance.
Auerbach Publications.
Verner, J.M., Brereton, O.P., Kitchenham, B.A., Turner, M. and Niazi, M., 2014. Risks
and risk mitigation in global software development: A tertiary study. Information and
Software Technology, 56(1), pp.54-78.
Zhang, Y. and Fan, Z.P., 2014. An optimization method for selecting project risk
response strategies. International Journal of Project Management, 32(3), pp.412-422.