Energy

wind turbines against an evening sky

We advise energy companies on political and security risks to infrastructure and supply, the impact of policy and regulation on their strategy, and CSR and sustainability.

Client team: Political risk

Issue: Willis Towers Watson and Oxford Analytica conducted structured interviews with executives at a cross-sector group of leading global firms with a strong track record in political risk management, to discover how leading companies are responding to recent tumultuous political events.

Engagement: One-hour structured interviews were conducted with twenty panellists. The majority were Forbes Global 500 companies. The firms represented a cross section of industries including food and beverages, oil and gas, mining, pharmaceuticals, automobiles, and utilities. The companies are mainly headquartered in North America, Europe and Japan and have extensive global operations, including in “risky” countries.

Result: The survey found that investors are increasingly holding management accountable for losses experienced due to political risk exposure. Importantly, growing investor pressure to account for political risk exposure is likely to mean that companies will increasingly be compelled to benchmark such capabilities against their peers.

Client team: Geopolitical risk

Issue: How will political and economic developments in key African countries affect the client’s operations?

Engagement: Regular expert briefings and rapid-response analysis from our Advisory country risk team.

Result: The client enhanced its contingency planning mechanisms and is better prepared to pre-empt political and economic volatility.

Client team: Corporate security

Issue: How does the interplay between state and non-state actors pose a threat to the client's oil and gas operations in Somaliland?

Engagement: Stakeholder mapping of key militant groups and their relationship with other political and security actors from our Advisory corporate security team.

Result: The client prioritised operating locations in need of enhanced protection.

Client team: Sustainability

Issue: What long-term trends will affect the supply of natural resources required for future energy production?

Engagement: Our macro strategy and CSR teams carried out a study forecasting demand and supply across the spectrum of natural resources using our Advisory practice's macro forecasting methodology.

Result: The client developed strategies to anticipate future water scarcity and other resource constraints.

Client team: Risk Management and Finance

Issue: A global upstream oil and gas company needed a way to incorporate political risk into discounted cash flow projections.

Engagement: Risk and finance teams use the Value at Political Risk online, interactive tool to produce estimates of expected loss and probable maximum loss from political risk specific to the oil and gas industry and the firm's financial exposures, and incorporate them into their financial projections.

Result: The client's financial projections incorporate provision for political risk based on a sound methodological footing.

Client team: Country risk

Issue: The client wanted to understand what risks they should be most concerned about in the year ahead.

Engagement: Attendance at The Oxford Analytica Conference: Global Horizons 2015 where they participated in a range of highly interactive seminars, attended panels, networked and benefited from speaking with experts one-on-one about the major risks in key geographies and industries.

Result: The client gained new insights on current issues, a broader understanding of the key risks and opportunities in 2016 and knowledge of what their peers were concerned with; all of which fed back in to their day-to-day work to help achieve the strategic goals of their business.

Client team: Policymakers and those working in strategy, sustainability, business development or government affairs 

Issue: The comprehensive climate agreement at the 21st Conference of the Parties (COP21) has enormous potential to diminish man-made climate change - but also to disrupt existing policy and business models. With no stringent enforcement processes and no binding emission reduction targets, international peer pressure on significant emitters will be an important factor in realising that potential. Decisionmakers across business and the public sector need to monitor COP21's progress and the international climate of opinion.

Engagement: Subscription to the The Daily Brief, with customised email to provide high-priority notification of critical events and curated content to drill down into deeper background and analysis

Result: Clients receive continuous tracking and expert analysis of progress towards COP21 targets, for example in the implementation of national-level carbon-reduction pledges and gaining the 55 signatures needed for the agreement to come into effect.