Taiwo Hassan 
Business interruption is the primary concern for the oil and gas sector in 2024, according to the Allianz Risk Barometer. It is followed by Energy crisis (34%), Climate change (32%), Fire, explosion (26%) and Natural catastrophes (23%). The report, based on insights from over 3,000 risk management professionals and business leaders, highlights the growing importance of addressing these risks to ensure business continuity and safeguard against potential disruptions.
Business interruption remains a top risk in the oil and gas sector due to various factors such as supply chain disruptions, geopolitical instability, and fluctuations in oil prices. The report advised that mitigation strategies should prioritise implementing robust contingency plans, diversifying operations across multiple geographic regions, and investing in technology for real-time monitoring of production facilities and pipelines to detect and respond to potential disruptions promptly.
It added that establishing strong relationships with suppliers and partners, maintaining adequate inventory levels, and developing alternative transportation routes could help mitigate the impact of interruptions. According to reports, proactive risk management and resilience-building measures are essential for oil and gas companies to mitigate business interruption risks and maintain operational stability in a volatile environment.
It further hinted that energy crisis risks retained the second spot stemming from factors such as supply chain disruptions, geopolitical tensions, and regulatory changes impacting production and distribution. “Mitigation strategies should prioritize diversifying energy sources and investing in renewable energy technologies to reduce dependency on fossil fuels and enhance resilience to energy shortages.
“Implementing energy efficiency measures in operations and adopting advanced technologies for extraction and refining processes can optimize resource utilisation and mitigate the impact of energy crises. “Collaboration with governments, industry stakeholders, and research institutions to develop sustainable energy policies and strategies is crucial.
Proactive measures to enhance energy efficiency and diversify energy sources are essential for oil and gas companies to mitigate energy crisis risks and ensure long-term sustainability in a rapidly evolving energy landscape, according to reports. The also noted that climate change risks had increased from #4 to #3 due to its contribution to greenhouse gas emissions and vulnerability to the physical impacts of climate change such as extreme weather events and sea-level rise.
“Mitigation strategies should prioritize reducing emissions through investments in carbon capture and storage technologies, transitioning towards cleaner energy sources such as natural gas and renewables, and implementing methane reduction initiatives in extraction and production processes.
