Less than 10 per cent of National Oil Company (NOC) leaders surveyed by Marsh Inc strongly feel they have a full understanding of the risks they face – and how to effectively manage them.

This finding was contained in a new study released by Marsh, the world’s leading risk and insurance services firm, examining risks and operational challenges among state-owned oil enterprises, which own over 90 per cent of the world’s oil reserves.  Marsh gathered much of the data from a recent groundbreaking global risk advisory meeting held in Dubai and attended by approximately 250 leaders from NOCs, government and academia.
“The Impact of Risk on National Oil Companies,” also reveals a strong desire by NOC leaders to understand risk better and find better ways to share related best practices.  More than 90 per cent of the NOC leaders Marsh polled agreed that more discussion forums were needed.
“The spectrum of risk that business leaders face today is far more complex than ever before,” said Brian Storms, chairman and CEO of Marsh. “Not too long ago, the top concern for an NOC might have been a fire at a refinery.  But the study we conducted at the Marsh National Oil Companies Conference in Dubai shows that newer risks – such as the impact of climate change – are moving near the top of the list.”
Andrew George, Marsh’s Marine & Energy leader in Dubai, said: “We’re hopeful the many eye-opening findings contained in this new research will help accelerate an open dialogue on the risk issues and business challenges NOCs face.”
Marsh also cited other potential risks faced by national oil companies, including the potential for a terrorist act to halt distribution, the effects of a major natural disaster on production, the potential vulnerability of supply chains – especially due to the threat of avian flu, as well as a variety of operational risks, reputation risks, strategic risks and financial risks.
In response to the findings within the report, Marsh said it will again sponsor and lead its second annual risk advisory conference for NOCs in February of 2008.