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INSIGHTS RISK MANAGEMENT and operators:

Te Journey to Operational Success • How can we minimize exposure while

When it comes to any asset capital expenditure (Ca- pEx), investors, owners and operators are actively focused maximizing proftability?

• How can we chart as smooth a journey as possible on the question of investment risk vs. investment reward.

And while CapEx may present well on paper, the journey to get the desired outcome?

• Will we get the return needed from the current to operational success can be full of pitfalls, risks and dan- market we operate in?

gers – both seen and unforeseen.

However, the overarching question is how do all three

Although Due Diligence plays a vital role in the risk mitigation process, it is all too often isolated and does not (investors, owners and operators) integrate to achieve the outcomes they ultimately seek?

integrate across the plan, design, build and operational life- • cycle of the asset. In this article, I will explore the benefts of taking a holistic 3-step strategy that can help stakehold-

Addressing the Value Chain and Stakeholder Needs ers mitigate CapEx risk in a more effective way. Risk miti- Given the sheer scale of an investment of this type, it gation and global regulatory compliance connects both the is crucial to connect all phases of the value chain and un-

Western and Eastern owners, operators, and builders’ in- derstand the needs of all stakeholders by de-risking the vestments through demystifying the procurement, supply planning, design, build, operational and decommissioning chain, build and operations cycle. stages holistically. The solution lies in developing connect-

Addressing EPC’s in 2023 and beyond means one major ed teams across all phases that provide a seamless journey issue, and that is making sure the asset and, in this case, an from one stage to the next.

FPSO is operationally and regulatorily ready to operate off By adopting a 3-step model we can address these chal- the coastal waters of any new oil rich nation. The ultimate lenges. One of key success factors to this is to take a syner- risk mitigation of fnes, shutdowns and overall non-com- gized approach to de-risking the asset investment at every pliance is centered around Global Regulatory consultancy stage of the process, enabling the specifc project needs to and regionally based guidance for procurement, onsite en- be met while providing clarity and consistency throughout gineering and representation of regulatory compliance. the entirety of the project.

Due diligence means understanding your CapEx costs In short, synergy provides a foundation that seamlessly upfront of local content, regulatory based asset require- connects money to the asset, and asset to its operational ments, people requirements and operational drilling and parameters. We also combine this with external expertise in production issues. Adopting a due diligence approach fnance, investment, appraisals and specialist advisors, each plays a vital role in the project lifecycle that aligns with in- bringing a unique beneft to the client and in wider cases, vestment and operational expenditures. The goal is simple, the client’s client. It's an approach that adds value, mitigat- maximize uptime and minimize cost by combining due ing risk and creating effciencies across the asset lifecycle.

diligence and regulatory compliance.

What Does Adopting a Holistic 3-Step Approach

A Multi-Layered Approach to Due Diligence Look Like in Practice?

I often see clients strive to answer two fundamental

Let’s say, for example, a client wants to invest in a new asset.

questions: 1) How do I substantiate that an idea is viable, and 2) How do I make sure that ROI will hit the target?

Step 1 – Planning and Feasibility

These are questions of Risk vs. Reward, and they are

In this beginning step, clients share their ideas and dis- not easy to answer - especially when the approval of share- cuss the market opportunity they are looking to leverage. holders and board members hangs in the balance. There Based on these preliminary discussions, correlating market are risks at every stage of the plan, design, build, operate intelligence and client status, this conversation can include: and decommission lifecycle, including design risk, regula- • Feasibility studies tor risk, manufacturing risk, operational risk and cost risk.

• Market Analysis

It is a hugely complex maze to attempt to navigate, and • Shipyard review it is one that ultimately takes a multi-layered approach to • Owner/operator capability review solve. There are pressing questions for investors, owners • Design Review and Verifcation

MARCH/APRIL 2024 OFFSHORE ENGINEER 57