GRM 2010 GRM 2011

Abstract Details

Family Name:
First Name:
Title of Paper:
Comparative risk analysis of the oil and gas industry in the GCC- a multi-level approach
Paper Proposal Text :
The GCC is a major producer and exporter of oil and gas, yet inhabits a region filled with volatility and political instability. Since the discovery of oil, each decade has presented new political challenges that have affected oil prices and production. Due to the importance of GCC oil and natural gas, there is an interest by various multi-level actors to assess the challenges and risks to the production and export in the region.
Risk analysis can be viewed from various perspectives and traditions. From an economic perspective, risk analysis focuses on the anticipation of risk and how it can be controlled by preventive action. This is carried out within the framework of statistical and economic models (mostly-cost-benefit analyses). Within this analysis it is thought that “risks can be classified, quantified and to some extent predicted, and that rational behaviour can help us manage — or perhaps even eliminate — risk” (Peterson, 2011:5). The anthropological perspective views risk as something that is culturally and socially constructed. Hence, within this framework, risk is constructed by society and is dependent upon the social groupings, identity or institution that make up the society. Risk perception is therefore not based on the actual amount of risk, but how the risk is perceived (Douglas & Wildavsky, 1982). This will differ depending on the society and the culture of the subject of risk analysis. This type of analysis seeks to improve and manage socially and culturally defined risks. The third perspective of risk analysis emerges from social and radical constructivists. They contend that risk represents “a modern discursive construction, which is ever-changing due to constant political struggle and decision-making” (Peterson, 2011:5). In this paradigm, risk is considered a practice that disciplines behaviour instead of an analytical tool.
An opposing lens through which to view risk is through security studies. Within this field, the three dominant schools are critical risk studies, global risk management and political risk studies. Critical risk studies is based on the concept that within “the academic field of international relations, the concept of risk has shifted security away from the register of war and violence generally associated with the concept of security” (Aradau et al., 2008: 2). The primary purpose of this perspective is not to develop solutions to risks, but to be critical. Therefore, the focus of critical risk studies is on the risk governance in the practice of companies and governments (Amoore, 2004). Global risk management is used as a means to deal with the constantly changing security environment. In this approach, risk is defined in its relation to security with a distinction being clearly made between threat and risk. This approach aims to understand risk management through the description of the transitions of governance. The third school of thought in risk analysis from the security studies perspective is political risk analysis. The aim of this approach is to come up with solutions to risk. Unlike the other two frameworks within the security studies field that are solely IR approaches, political risk analysis is used within business studies. Governments and companies use this method to actually assess the risk faced when making investments in a foreign country.
This paper will characterize the risk analysis using a multi-level approach. It will show that the analysis is very much dependant on the actor conducting the analysis. It will evaluate the different perspectives from an international, regional and state level. At the international level, the evaluations of multinational of oil companies (BP, Shell, Exxon and Total), the great powers (US, EU) as well as international organizations (UN, IEA, OPEC) will be considered. At the regional level, the perspectives of the GCC will be examined. Finally, on the state level, the UAE will be investigated as it presents a unique case study of a state which is a major producer and exporter of energy, yet has to grapple with domestic issues of an ever increasing energy demand whilst attempting to diversify the energy portfolio and its economy.
This paper ultimately aims to demonstrate that risk analysis is largely directed toward the interest of the various actors, and as a result, policy is determined by these interests. It will critically compare and assess the challenges of the oil and gas industry in the GCC, with a focus on the UAE. A holistic risk analysis, with less bias, is required for a comprehensive assessment of challenges facing the industry.

Amoore L (2004) “Risk, reward and discipline at work” Economy and Society, 33(2) pp174–196
Aradau C, Lobo-Guerrero L and Münster RV (2008) “Security, technologies of risk, and the political-Guest editors’ introduction” Security Dialogue 39 pp2–3
Petersen, Karen Lund (2011) “Risk Analysis - a Field Within Security Studies” European Journal of International Relations pp1–25
Douglas M and Wildavsky A (1982) “Risk and Culture: An Essay on the Selection of Technical and Environmental Dangers” Berkeley, CA: University of California Press