Project Risk Management


Institutional Affiliation:











Both developing and developed world economies are facing more complex regulatory and compliance measures following the occurrence of several financial crisis, while capitalizing on opportunities in the growing world companies like MexiEnergy Inc. are required to understand new markets and navigate on any expected risks. Consequently, risk management remains at the top of any expansion corporate agenda. The most important way to manage any risk is to practice diversity. In essence, while MexiEnergy Inc. looks to add on its service provision it faces some risks, these are: an increase in complexity and uncertainty surrounding organizations as they search for innovative ways to expand into new markets and as it faces off against increasing competition and pushing the envelope on the usable technology.

As MexiEnergy expands, there will arise different problems of a more complex nature than experienced. These are like the mentioned political pressure caused to the “avoidable cost”. These costs which are termed to be low could be instigated in ways that hinder expansion of the companies’ energy resources. Apart from the pressure, there exists a risk to waste resources. The “take-or-pay” gas plan is projected to waste both time and resources in the expansion process. These challenges should be addressed as soon as they can be dealt with and should be included in MexiEnergy Inc risk management plan.






Quantified Risk Description Calculations
Exposure Factor (EF)

Examples are the above mentioned KNOWN risks.

This is the percentage of asset loss caused by the known and identified threats/risks. It is measured as percentage from 0 to 100% exposure factor.
Single Loss Expectancy(SLE)

This value could be used to identify the factor that is presented by the “take-or-pay” gas plan.

It is a product of asset value and the exposure factor. Asset Value multiplied by the exposure factor.


Annualized Rate of Occurrence(ARO)

The river as a source could quantized here.

It is the estimated frequency of a threat occurring with a year’s period. Calculated by diving the risk and the number of years. Example once in 10 years is 0.1.
Benefit Analysis It is the product of single loss expectancy and annualized rate of occurrence. Also known as the value of safeguard to a company. In the evaluation of benefit analysis there will be the use of Internal rate of return.

(Tan, 2002).

Qualitative Risk analysis is meant to put into tangible expressions any risk that may be perceived in the course of or even after project completion. The four mentioned qualitative analysis tools could be used by MexiEnergy Inc. to estimate the risks to be encountered in the project.


Apart from basic project planning, risk management involves specific planning for risk. In the planning for risks there are methods such as schedule modifications done to adjust the project by MexiEnergy. One of the schedule modifications to be done on the energy project would be to hold up on the purchasing power from independent producers. Scheduling this will enable rigorous investigations to the best companies to procure from. Since risk planning starts by exploring the initial project assumptions, another schedule modification for the product should be done to ensure that both of the goals Mr. Sam sets are met. The second modification ensures that natural gas is confirmed and that it is surplus enough to share among neighboring institutions.  This will ensure that the perceived goals are met with minimal risk.

Project charters, datasheets, or other documents used to initiate a project often include essential information on risk, as well as goals, staffing assumptions, and other information. Any risk information included in these early project descriptions is worth noting; sometimes projects believed to be risky are described as such, or there may be other evidence of project risk. Due to the importance of thoroughness in project management another recommended modification would be to ensure perfect work in any part of the project with stiff penalties. This modification will not encourage delays but will instead give ample time for employees on the contract to do perfect work—after all there is no room for failure. In addition, since the river is natural resource requiring approval, modifications are necessary in order to settle the whole issue.

Various schedule modifications ensure that the project runs more smoothly than it would have without the different modifications. Modifying project schedules efficiently, ensures that autonomous productivity is achieved in the project. That is, the modifications made ensure each department of the projects performs as expected.



Ding Tan. (2002). Quantitative Risk Analysis Step by Step. SANS Institute.