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Business Continuity Management for Oil, Gas & Petrochemical Industries. by Mr. Venkataram Arabolu, Managing Director, BSI Management Systems India In Association with PetroFed. September 16, 2008, New Delhi. About BSI Group. Founded in 1901, Royal Charter Company

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slide1

Business Continuity Management for

Oil, Gas & Petrochemical Industries

by

Mr. Venkataram Arabolu,

Managing Director, BSI Management Systems India

In Association with PetroFed

September 16, 2008, New Delhi

about bsi group
About BSI Group
  • Founded in 1901, Royal Charter Company
  • Clients in over 120 countries, BSI India Commenced operations in year 2000 and has over 3500 customers.
  • Independent assessment (third party & second party), certifications and training of management systems
  • Product testing Labs & services
  • The development of Management systems Standards such as BS 5750 (later became ISO 9001)
  • Integrated Management System software
what is business continuity management
What is Business Continuity Management ?

Definition

Holistic managementprocess that identifies potential threatsto an organization and the impacts to business operations that those threats, if realized, might cause, and which provides a frameworkfor building organizational resilience with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand and value-creating activities

slide6

Heart of U.S. Oil and Gas Industries Shut Down as Storm Approached

About 23 percent of the nation's oil refining capacity lies along the Texas coast

slide8

Spread of Oil & Gas facilities covering Texas, Louisiana, Mississippi & Alabama

Oil & natural gas production has been shut (US major Oil refineries with capacity of 5 MMBBL which is about 30% of US capacity in the effected area)

Staff has been evacuated from 452 production platforms (63.0%) and 81 rigs (66.9%)

4.5 Million people with power outage,no water, no power and no gasoline.

Shallow water facilities that currently act as a hub

Deepwater facilities that currently act as a hub

Future deepwater facilities

Pipelines

disruptions in india
Disruptions in India
  • Private Petroleum companies Shut retail outlets
  • Oil spills threaten Gujarat marine park,
  • Refinery fire & Explosion leading to shutdowns, affecting supplies & profitability etc
  • Spurt in LPG imports due to unit interruption

BHN 5

BHN 5 after the fire

emerging threats
Emerging threats….

Terrorism

Outsourcing

Learned helplessness

Resource nationalism

obsolescence

Pandemics

IT Security

Acquisition

unexpected event

Corporate

Culture

Unreliable supply

Regulation deregulation

Global warming

revisit business continuity management
Revisit - Business Continuity Management

Definition

Holistic managementprocess that identifies potential threatsto an organization and the impacts to business operations that those threats, if realized, might cause, and which provides a frameworkfor building organizational resilience with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand and value-creating activities

reality
Reality
  • Nearly 1 in 5 businesses suffer disruption every year

Source BCI

slide17
What do you think is currently the weakest link in your Business continuity strategy, planning and recovery efforts?
slide18

18

18

BS 25999

  • BS 25999-1:2006
    • Code of practice for business continuity management
    • Published 28 November 2006
  • BS 25999-2:2007
    • Specifications
    • Published 20 Nov. 2007
business continuity lifecycle

Embedding BCM in the organization's culture

Understanding the Organization

Exercising, maintaining

and reviewing

Determining BCM strategy

BCM program Management

Developing and implementing BCM response

Business Continuity Lifecycle
plan do check act pdca cycle

Continual improvement of the Business Continuity Management System

Interested Parties

Interested Parties

Plan

Establish

Act

Do

Maintain and improve

Implement and operate

Business Continuity requirements and expectations

Check

Managed Business Continuity

Monitor and review

Plan–Do–Check–Act (PDCA) Cycle
why bcms
Why BCMS ?
  • Minimize business disruptions
  • Quickly recover to normal business operations
  • Protect an organization’s value and reputation
  • To meet
    • shareholder commitments
    • national / legislative requirements
    • legal, regulatory and contractual commitments
    • moral and social responsibilities
  • Demonstrate “best practice”.
  • Reduce insurance liabilities.
slide23

Sample Organizational Risk Culture

Board

Seeks strategic dialogue about risk but must rely on intuition

Lacks the knowledge & risk vocabulary to engage in dialogue with management

Has narrow & siloed view of risk, often focusing on compliance

Understands the risks but has little influence on decision making

CEO

CRO

CFO

Business Unit

Business Unit

Business Unit

Treasurer's office

Uses sophisticated risk management tools, but only for short term risk

Lacks the sophistication to understand, much less measure, their own risks

Source HBR Sept 08

risk matrix
Risk matrix

Critical

Less

critical

risk impact versus control
Risk Impact versus control

IMPACT FACTOR VS STRENGTH OF CONTROL FOR ACTIVITIES

Vulnerability impact factor

Strength of Controls

Priority focus should be on the aspects with high risk and those with the largest gap between risk and control

bcm the way forward
BCM – the way forward

1. Top level commitment

2. Initiate the

Management Process

8. Test, Exercise and

Maintain the Plan

7. Developing and

Implementing the

Plan

3. Identify the

Threats and Risks

6. Develop Strategies

4. Manage the Risks as

part of Risk Management

5. Business Impact Analysis (BIA)

slide29

Where BCM is going?

  • No longer just a fashion accessory, BCM is now an integral part of managing the business
  • Integrated across all business functions; no longer seen as an IT speciality
  • Now being accepted as a strategic business imperative
  • Progress towards independent auditable processes
    • BS25999-2
  • Broader based agreement on what is best practice in the form of the a new standard, BS 25999-1
thanks
Thanks

End of Presentation