Page 36 - Industrial Plants

the graying of experienced project managers is reducing
available capabilities. These factors combined increase
the level of project-related risk within the sector.
Unless a company follows a strategy of complete risk
avoidance and stays solely within its national boundaries, it
will be faced with the need to consider political risk when
investing outside its home country. The challenge therefore
is to manage the political and other risks that are unavoidable XYLEM Group is a Service specialized
in the industry. How well these risks are analyzed and
managed will often be key to a project’s success. EPC Contracting Company with expertise
Classic political risk in the form of expropriation and
nationalization remains a threat, although it is not as in the following fields of operation
prevalent as it once was. Remember, that expropriation
or nationalization does not in and of itself violate for the Oil & Gas, Petrochemical
international law, provided there is prompt, fair and
adequate compensation to the investor. Risks of and Power sectors:
Fig. 6 - Threats: oil and gas industry contract repudiation such as was experienced by Enron
in India, and so-called “creeping nationalization” as • Project Financing
evidenced by punitive taxation, burdensome labor and
environmental regulations, price and monetary controls, • Process Design
pose a greater and probably more likely risk today.
While political risk can be managed through • Basic and Detailed Engineering
insurance, strategic alliances and partnering, it can
also be minimized, by taking some actions, which • Procurement Services
may seem obvious, but are too often ignored.
Effective techniques include keeping a low profile, • Equipment and Bulk material Supply
maintaining close relationships with the host
government, anticipating change and working with it, • Construction and Installation
avoiding geographical concentration, being a good
corporate citizen and utilizing local suppliers and • Commissioning and Start-up
Fig. 7 - Cumulative articulated by a set of logical axioms, and a methodology personnel to the greatest extent possible so as to
risk frequency at and collection of systematic procedures, based upon create an economic link with the host country that • EPC Project Management
project’s value level those axioms, for responsibly analyzing the complexities establishes a national constituency with a stake in
inherent in decision problems. your continued political survival. However, no form of • Quality Management & Material verification
political risk insurance can protect a company if it
engages in bribery or corruption, or pollutes the
Conclusions environment. Such actions would probably void any
Projects today are getting larger and more complex. The political risk insurance that was obtained.
attraction of upstream profits is also driving many Information technology can help mitigate operational
companies to consider expanding their investments, risks. Organizations that understand their risk profile and
moving from investor to operator, or entering into the take concrete action to mitigate risks will be better
space from adjacent energy sectors. At the same time, positioned to be successful in the marketplace.

Massimo Rebecchi

Massimo Rebecchi is graduated in Civil Geotechnical he established Xylem srl in Milan. As President and
Engineering. He he has achieved PhD in Minerals and Managing Director he satisfied the Opertions, Project and
Petroleum Engineering in the United States. For years he Quality requirements of several Main Contractors. XYLEM srl
was freelance professional as Mud Logger and Drilling Today Xylem is a Lead Business Consultant Company in Via G.Fara 39 20124 Milano
Project Manager. He attended important construction Industrial Construction (Oil, Gas, Process, Mills, Rail) for
projects under CCC-Sicon Oil group. Operations, Project Management and Sourcing Quality Ph. +39 02 36634000
As a GE consultant in Nuovo Pignone since 2010, he Management located in Italy, Emirates, France and Algeria. Email: info@xylem.it
attended several strategic Projects. During this experience

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