KJO Raises the Bar to Implement ERM to International Best Practice
- NWDS Risk Management Improvements
- Delta Electricity
- Discovery Metals Mining
- TWP Mining
- North West Disability Services (NWDS) continues its GRC momentum with a KnowRisk Compliance Module
- CSD (Gh) Formalises ERM using a State-of-the-Art Solution
- KJO Raises the Bar to Implement ERM to International Best Practice
- Blacktown City Council brings ERM to Charting a Course for the City for the Longer Term
- CorProfit – KnowRisk®
CorProfit leads ERM Implementation in Al-Kafji Joint Operations
KJO (Al-Khafji Joint Operations), owned jointly by Aramco Gulf Operations Company Limited (AGOC) and Kuwait Oil Gulf Company (KGOC) engaged CorProfit to lead the ERM Implementation during 2020.
JOC (Joint Operating Committee) accepted CorProfit’s proposed ERM Roadmap consisting of eleven Risk Programs to be implemented over a 3-year time frame.
CorProfit had worked in close cooperation with the KJO Risk Team during 2018 and 2019 to review all documentation and software applications used in the management of risk, as well as conducted training programs for management and risk coordinators, resulting in an enhanced set of ERM documentation at international best practice standards.
The Risk Management Division acknowledged that the high calibre, high quality work performed by CorProfit should in turn have a company, with tried and proven experience in ERM lead the Implementation of KJO’s ERM Roadmap. CorProfit was appointed by JOC to lead the Implementation that included a train-the-trainer approach.
Corporate Risk the First Cab Off the Rank for ERM Implementation
The Chairman issued a letter to inform all employees to cooperate with the ERM Team to maintain the agreed schedule of Workshops across 22 Departments. The Chairman requested, “Staff and contractor support is essential to the success of ERM. I strongly encourage open, timely and frank discussions regarding risks during the Workshops.”
The Workshop Agenda consisted of:
- ERM Groundwork
- Risk Workshop Objectives
- Orientation to the Risk Management Process
- Divisional Contexts and associated Objectives
- Previous Risk Registers, still relevant?
- Risk Workshop through Risk Process
- Summary and Next Steps
Using Risk Software live during the Workshops has been an eye-opener for KJO, being the first time in 9 years of running workshops. It was evident that the user-friendliness of software cannot be overstated; the effusive engagement of staff led to good quality data being captured.
The KJO ERM Team and CorProfit prepared Risk Registers following the workshops, giving ownership of these to the respective Managers and their Superintendents.
Several Reports were prepared including the overall Risk Register, Top 10 Risks, Risks managed from needing addition Controls, Emerging Risks and Action Plans.
CorProfit programmed Executive Reports for Departmental (the Manager), Business Line (the Executive Director) and Board levels, comprising the extraction of data from the Risk System into Word as a polished report.
Ongoing reviews will take place monthly, with quarterly reports across the corporate risks that KJO is facing.
CorProfit Engaged in KJO Activation of BCP during the Global Pandemic
With the coronavirus starting to reach Saudi Arabia, the Saudi Government took pre-emptive action to create awareness of the need to take precautions. The Head of Risk in KJO was invited along with his peers of a number of major companies that underpin the economy, and together they developed a comprehensive set of guidelines to be used. The BCM Guideline was endorsed by the Oil Ministry.
CorProfit was requested to develop the BCM compliance and procedures to conform with the BCM Guideline. In effect KJO had activated a BCP that was led by the KJO ERM Team with the objectives of having a minimum workforce on the Company’s facilities with the necessary safety precautions in force and maintaining oil and gas production.
At an early stage of contending with the potential of the health risks adversely impacting KJO, CorProfit set out some scenarios and one of these became the actual situation to be dealt with.
CorProfit’s role under the business interruption threat:
- Participate in a review of the onsite-KJO Hospital to manage a potential pandemic risk
- Develop the BCP Compliance program in a Risk System, to provide top management with assurance that KJO complied with the BCM Guideline.
- Design and build a BCP across the KJO Production Assets and Office Facilities; CorProfit identified 11 scenarios that address the most realistic business interruption events KJO faces now or in the future.
The BCM for KJO is of a world class leading solution, which the Company will implement during the ERM Implementation Roadmap. This has moved the goalposts of the way BCP is traditionally conducted as a largely paper-based system, into a live Risk System.
The significance of this is that should an interruption event be encountered, KJO has the BCM Procedures that shows how to recognise the threat in the first place, an incident in the next place and finally the mechanisms to activate a BCP and follow the BCM Steps in a structured way, only at the location that needs the response to take place.
The outcomes of maintaining the BCP during the pandemic include:
- Continuous rate of production
- Safe operations
- Contributions to the local community
- Value for shareholders
CorProfit has assisted KJO to have a dynamic BCP that is sensitive to the specific response measures needed at the time, rather than trying to keep a paper-based document which is limited in its effectiveness.
CorProfit has aligned the KJO ERM Process and BCM to work together, which is a likely world-first.
KJO (Al-Khafji Joint Operations) is owned jointly by Aramco Gulf Operations Company Limited (AGOC) and Kuwait Oil Gulf Company (KGOC). The shareholders and KJO combined are the world’s largest producer of crude oil.
KJO Raises the Bar to Implement ERM to International Best Practice
KJO (Al-Khafji Joint Operations) is owned jointly by Aramco Gulf Operations Company Limited (AGOC) and Kuwait Oil Gulf Company (KGOC). The shareholders and KJO combined are the world’s largest producer of crude oil.
A Tender for an ERM Review and Enhancement was decided on, following 2 unsuccessful attempts from 2010 by the internal ERM Team. They had used the KJO Risk Management Policy, Framework & Procedure Manual. After 6 years of not achieving the level of ERM Implementation expected, the JOC (Joint Operating Committee that directs and manages production and administration functions) decided that it was important and timely for KJO to engage a third-party ERM expert to provide an unbiased overall review and enhancement of KJO’s current ERM practices.
CorProfit was 1 of 7 that were pre-qualified from several countries and after the Tender closed, it took KJO about 10 months to complete the Tender process. KJO was determined to ensure that the evaluation process was not solely based on the lowest prices.
CorProfit was awarded the consulting services Contract to span 3-years, with the first 6 months to cover the review and enhancement of KJO ERM documentation and practices.
The kick-off meeting that CorProfit facilitated demonstrated to KJO that CorProfit had understood their requirements and expectations.
This was followed by a Workshop to confirm the Vision that KJO has for ERM, with clear improvements defined each year for 4 years in a Maturity Roadmap. CorProfit had anticipated certain aspects of ERM, that weren’t defined in the Tender documents would also be of value and KJO confirmed that these should be included.
After a few days of working with the ERM Team, the Superintendent of Risk called CorProfit into his office and informed that of the 7 Tenderers, only CorProfit’s offer gave KJO confidence. As there were lower priced offers, KJO was obliged to interview those Tenderers and it became evident that they lacked the complete knowledge.
Demonstrated Outcomes from CorProfit Involvement in KJO ERM
- KJO’s Joint Operating Committee has firmly taken ownership for driving ERM across KJO. Prior to CorProfit starting, the ERM Team had little involvement with JOC for some years.
- Enhanced KJO Risk Management Policy, Framework & Procedure documentation to International Best Practices (KJO has the opportunity to compare with documentation of the Shareholders and others).
- Benchmarked KJO against reputable oil & gas companies in the Middle East and 1 from Australia, which confirmed that KJO has the opportunity to lead ERM in their Region.
- Risk Appetite statement and methodology that reflects KJO’s Corporate Objectives.
- Review of KJO’s Risk System and documentation with CorProfit Reporting the findings of all assessment, surveys, recommendations, etc. related to the ERM Review project.
- Proposed a series of Risk Management Reports format for all levels in KJO that show the status of managing risks and action plans.
- ERM Awareness Training Programs for Managers and Superintendents
- ERM Training for Risk Coordinators and ERM Team
- ERM Implementation Plan with supporting documentation in detail, including improvement action plans, supported by milestones, for KJO to achieve the targeted ERM Maturity levels
- KJO ERM Maturity Levels Road Map covering a 4-year span
Scope of Work performed by CorProfit
CorProfit found that the KJO ERM was motivated to gain as much knowledge as CorProfit could share. The cooperation between CorProfit and the KJO ERM Team was a key factor that brought all items in the Scope to be fulfilled to everyone’s satisfaction.
CorProfit’s Scope of Work completed:
To review all relevant policies, framework, procedures, processes, tools, software, structures, etc. that relates to the directing, administering or controlling of the ERM activities in KJO, i.e., in accordance to the international best practice.
To assess and review the current KJO Risk Management Policy & Procedure Manual to ensure that it is comprehensive, rigorous and relevant to the Company’s operations. This shall be done in accordance to the ISO 31000 Risk Management – Principles and guidelines.
To benchmark the Company’s ERM practice with the best practice of reputable Oil & Gas companies.
To develop the Risk Appetite Statement and Methodology that reflected KJO’s Corporate Objectives.
Propose suitable Risk Management Reports format for all Company levels that show the status of managing risks and action plans. Reporting is to give assurance to the top management that strategic and key risks are managed within Risk Appetite.
Provide training and coaching of the Company’s ERM Team
Conduct two (2) introduction/implementation workshops for executive management and department managers.
Conduct five (5) introduction/implementation workshops for Superintendents and Risk Coordinators.
Establish a Road Map spanning up to 5-years for the Company’s ERM maturity levels progress.
To develop and document all the required specific improvement action plans, supported by milestones, for the Company to achieve the targeted maturity levels.
CorProfit’s ongoing role is to support the ERM Implementation:
Conduct an annual follow-up review and assessment for the ensuing two (2) years (year II and year III) to ensure that the ERM implementation in the Company is continuously in the right track of progress.
ERM Review and Enhancement
A Tender for an ERM Review and Enhancement was decided on, following 2 unsuccessful attempts from 2010 by the internal ERM Team. They had used the KJO Risk Management Policy, Framework & Procedure Manual. After 6 years of not achieving the level of ERM Implementation expected, the JOC (Joint Operating Committee that directs and manages production and administration functions) decided that it was important and timely for KJO to engage a third-party ERM expert to provide an unbiased overall review and enhancement of KJO’s current ERM practices.
CorProfit was 1 of 7 that were pre-qualified from several countries and after the Tender closed, it took KJO about 10 months to complete the Tender process. KJO was determined to ensure that the evaluation process was not solely based on the lowest prices.
CorProfit was awarded the consulting services Contract to span 3-years, with the first 6 months to cover the review and enhancement of KJO ERM documentation and practices.
The kick-off meeting that CorProfit facilitated demonstrated to KJO that CorProfit had understood their requirements and expectations.
This was followed by a Workshop to confirm the Vision that KJO has for ERM, with clear improvements defined each year for 4 years in a Maturity Roadmap. CorProfit had anticipated certain aspects of ERM, that weren’t defined in the Tender documents would also be of value and KJO confirmed that these should be included.
After a few days of working with the ERM Team, the Superintendent of Risk called CorProfit into his office and informed that of the 7 Tenderers, only CorProfit’s offer gave KJO confidence. As there were lower priced offers, KJO was obliged to interview those Tenderers and it became evident that they lacked the complete knowledge.
Demonstrated Outcomes from CorProfit Involvement in KJO ERM
- KJO’s Joint Operating Committee has firmly taken ownership for driving ERM across KJO. Prior to CorProfit starting, the ERM Team had little involvement with JOC for some years.
- Enhanced KJO Risk Management Policy, Framework & Procedure documentation to International Best Practices (KJO has the opportunity to compare with documentation of the Shareholders and others).
- Benchmarked KJO against reputable oil & gas companies in the Middle East and 1 from Australia, which confirmed that KJO has the opportunity to lead ERM in their Region.
- Risk Appetite statement and methodology that reflects KJO’s Corporate Objectives.
- Review of KJO’s Risk System and documentation with CorProfit Reporting the findings of all assessment, surveys, recommendations, etc. related to the ERM Review project.
- Proposed a series of Risk Management Reports format for all levels in KJO that show the status of managing risks and action plans.
- ERM Awareness Training Programs for Managers and Superintendents
- ERM Training for Risk Coordinators and ERM Team
- ERM Implementation Plan with supporting documentation in detail, including improvement action plans, supported by milestones, for KJO to achieve the targeted ERM Maturity levels
- KJO ERM Maturity Levels Road Map covering a 4-year span
Scope of Work performed by CorProfit
CorProfit found that the KJO ERM was motivated to gain as much knowledge as CorProfit could share. The cooperation between CorProfit and the KJO ERM Team was a key factor that brought all items in the Scope to be fulfilled to everyone’s satisfaction.
CorProfit’s Scope of Work completed:
- To review all relevant policies, framework, procedures, processes, tools, software, structures, etc. that relates to the directing, administering or controlling of the ERM activities in KJO, i.e., in accordance to the international best practice.
- To assess and review the current KJO Risk Management Policy & Procedure Manual to ensure that it is comprehensive, rigorous and relevant to the Company’s operations. This shall be done in accordance to the ISO 31000 Risk Management – Principles and guidelines.
- To benchmark the Company’s ERM practice with the best practice of reputable Oil & Gas companies.
- To develop the Risk Appetite Statement and Methodology that reflected KJO’s Corporate Objectives.
- Propose suitable Risk Management Reports format for all Company levels that show the status of managing risks and action plans. Reporting is to give assurance to the top management that strategic and key risks are managed within Risk Appetite.
- Provide training and coaching of the Company’s ERM Team
- Conduct two (2) introduction/implementation workshops for executive management and department managers.
- Conduct five (5) introduction/implementation workshops for Superintendents and Risk Coordinators.
- Establish a Road Map spanning up to 5-years for the Company’s ERM maturity levels progress.
- To develop and document all the required specific improvement action plans, supported by milestones, for the Company to achieve the targeted maturity levels.
CorProfit’s ongoing role is to support the ERM Implementation:
- Conduct an annual follow-up review and assessment for the ensuing two (2) years (year II and year III) to ensure that the ERM implementation in the Company is continuously in the right track of progress.