EVALUATION OF RISK AND CONTIGENCY PLANS IN THE OIL AND GAS INDUSTRY IN SAUDI ARABIA

Abstract

The study used seven qualitative interviews with Saudi oil and gas company managers in an effort to identify various risks, both internal and external, which affect their operations, as well as to critically evaluate current risk and contingency planning the industry. The findings revealed that the main areas that pose risk to the sector are a) climate change, both in the form of direct threat posed to facilities due to increased natural hazard risk and as a factor that facilitates the development of other energy production methods (renewable energy) which act competitively to the oil and gas industry b) man-made threats, mainly in the form of terrorist attacks and sabotage, motivated by geo-political conflicts, or piracy c) accidents (mainly oil spills and offshore platform incidents) d) other emergencies, exemplified by the coronavirus pandemic. In terms of contingency planning, the Saudi oil and gas sector appeared better prepared for man-made threats, with extensive measures in place after recent drone attacks, while the preparedness against direct natural hazards needs to be upgraded based on more recent data, and the long-term consequences of climate change require more specific measures and strategic planning. The pandemic is an issue that has also affected operations to an important degree, showcasing the dangers of unforeseen risks. The research also includes some recommendations based on the findings, such as innovative areas of renewable energy investment that would allow a smoother gradual transition for the kingdom, as well as more data-driven emergency plans that go beyond the fundamental measures necessary.