Vikor methods basic in risk management of petroleum enterprise in Yemen

薩拉

（Salah Gamil Abdulghafor Saif）

Abstract： Oil is playing an important role in developing any country. In this paper， based on research on risk management of petroleum enterprise and find solutions to reduce the risk of oil operations， risk management is very important for the oil companies. Oil is the top priority projects for the establishment of a mechanism of risk management system and risk control according to the characteristics of petroleum operations to meet the needs of modern management. Finally， we address the risks of the oil project management and offers a number of specific recommendations and measures with actual cases. In this regard， the present study identifies the risk management of petroleum enterprise projects of Aden refinery and then VIKOR method applied to the study of the priorities of the proposed options， which can provide effective support for decision-makers.

Keywords： Petroleum Enterprise， Risk Management， VIKOR Methods.

1.Introduction

Along with economic development and scientific and technological progress， the world demand for energy is increasing dependence on energy is also increasing. Among them， an important oil has become the world's major energy and strategic materials， and one of the most important raw material of modernization has become deeply infiltrated all aspects of the national economy and people's lives.

Yemen has entered the area of oil in the summer of 1984 upon the Hunt Oil Company announced the first commercial discovery of oil in Yemen （Alif Field）. After that， many successful oil explorations in the other fields. Oil is the most important pillars of the economic entity where a large proportion of the national income of the country of his product， and in view of the significant role the oil industry plays it is essential that investment is being direct to achieve consistent returns and content， and therefore In the introduction to all the procedures that ensure direct exploitation is to work on creating and updating of the technical and administrative organs， development and up gradation through courses and missions to many countries of the developed world as well as the establishment of a vocational training center provides a higher level of these devices in line with the rapid development of the industry. Risk management has become the most discussed themes area in the last decade. Risk Management， one of the newest concepts of project management is interesting to focus on because of its advantages and capabilities. It is one of the basic and important subjects of the project. This situation is due to the increased risks in the companies' environment because of the domination of uncertainty.

VIKOR method is one of the multi-criteria decision-making methods for selecting the best option. This technique， in addition to offering two reference points as ideal negative and positive points， considers the relative significance of the interval between them.

The experiences of major projects of the past in Yemen show that one of the primary factors of failure of projects is a lack of sufficient attention to the presence of uncertainty and risk of projects. Most of the projects do not end within the limits of their assigned time and project. One can point to ignorance of risk management and its undeniable significance in projects as the main reasons for this lack of success.

Significance： Risk management is a scientific management method to identify， measure and analyze risk and on this basis to deal effectively with risk， to achieve maximum security at minimum cost. Risk management originated in the 20th century. In recent years， with the continuous development of business management， risk analysis theory and risk analysis method have matured， and many international petroleum enterprises pay more attention to risk management and strive to minimize the risks， and risk management has been used as an important component of petroleum enterprise management. With the combination of theory and practice， risk management content and risk analysis method of oil enterprise are constantly developed. At present， risk analysis of international petroleum enterprise has grown from a simple risk analysis method to risk evaluation system or risk management. With the economic globalization， world's petroleum enterprises are facing the more intense competitive situation. The oil industry is the pillar industry of many producing countries， so it is very important to strengthen risk management， especially risk control of petroleum operations.

In this regard， the present study identifies the risk management of projects of Aden refinery and then the VIKOR method is applied to prioritize the suggested options of present study.

2.Literature Review

In a literature， a little of studies were found about an application of standards and frameworks in oil and gas projects. This can be explained by the fact that petroleum industry a long time "have not been a traditional area of the conventional practice of project-management techniques" （Sholarin， 2007）. It was discovered that in the oil and gas industry risk management is commonly associated with application of the specific standards that concerned with prevention of hazard risks4 such as oil spills， fatal accidents， workforce injuries， etc.

Büyük zkan and Ruan （2008）extended the fuzzy VIKOR method for measuring the performance of enterprise resource planning software products. Büyük zkan et al. （2011） applied a fuzzy VIKOR based approach to identify the most appropriate knowledge management tool for improving the effectiveness of their organization. Liao and Xu （2015） developed the cosine distance-based hesitant fuzzy linguistic TOPSIS method and the cosine-distance-based hesitant fuzzy linguistic VIKOR method.

3.Research methods

we complete the work by the theory and practical application of a combination of improvements in the way， as well as domestic and foreign research data in this area， and data collection policies， on the basis of the relevant research materials and data， apply them to practical problems to prove the feasibility and effectiveness of this method， while giving practical problems study provides a new way of thinking.

4.Evaluation Method

establish evaluation index system for the selection of refined risk management in petroleum enterprise and use the theory of VIKOR methods for Complete evaluation of risk management in petroleum industry； Optimization risk evaluation model with VIKOR methods： Based on the overall strength of screening meets the conditions for cooperation partners， through evaluation model to analyze the risk management in petroleum enterprise， set its objective function according to the actual structure of the refined risk management in petroleum enterprise characteristics， parameters and decision variables， find the problem in petroleum enterprise and build model with VIKOR and solve.

5.Innovation

Apply VIKOR methods in risk management of petroleum enterprises in Yemen seeking for new methods， adjustment methods， sorting methods， fix incomplete information so we can evaluate the incomplete enterprise's risk information and methods and solve it and come up with new solutions. The purpose of the paper is to identify risk factors， which affect oil and gas Industry in Yemen and derive risk responses.

6.Risk Analysis

Classification of petroleum operation risk is different from investment risks. According to the theory of risk management， and combined with the characteristics of petroleum operations， this paper shows the risk organization of petroleum operation with the brief description.

a）Natural environmental risk

b）Engineering risk

c）Management risk

d）Economic risk

7.Strategies and Measures

a）Risk awareness

b）Fine management

c）Core Technology

d）Highly-qualified personnel

Petroleum enterprise should develop human resources planning to use pioneering personnel. In the daily management of the enterprise， it should establish the distribution system with responsibility， power and benefits， and the incentive mechanism for talent under which talented people can be put to the best use and be prepared for both promotion and demotion to promote competition. Which is the most realistic talent strategy for petroleum enterprise.

8.Preliminaries

The basic concepts of the VIKOR （VlseKriterijumska Optimizacija I Kompromisno Resenje–a Serbian name） technique is based on the adoption of Lp-metric concepts to solve a decision-making problem with non-commensurable （different units） and conflicting criteria. This method focuses on the arrangement and choose from among a range of alternatives and identifies a compromise to make a decision with conflicting standards， and can help decision-makers to get the final solution and come to a firm decision. VIKOR method is an operative tool for multiple criteria optimization of complex decision systems. This method focuses on the arrangement and selection of a range of alternatives， and help decision-makers to make the final decision. This method provides a multi existing standards on the basis of "conjunction" to solve the "typical" arrangement. Here is a possible compromise solution that is closer to the ideal， and the settlement agreement， which means holding mutual concessions. In VIKOR， the multi-criteria measure for compromise ranking is develop from the Lp-metric that is use as an aggregating function in compromise programming. Different alternatives are indicated with A1， A2， ， AJ. Rating of Aj with regard to aspect， i displayed with fij. For example， fij is the value of ith criterion function for alternative Aj； n is the number of criteria. Development of the VIKOR method is started with the following form of LP-metric：

Lp，j=p1/p，1≤p≤∞；i=1，2，…，j

In the VIKOR method L1，j （as Sj） and L∞，J（as Rj） are used to formulate ranking measure. The solution obtained by min Sj is with a maximum group utility （‘‘majority” rule）， and the solution obtained by min Rj is with a minimum separate regret of the ‘‘opponent”.

9.Conclusion

Risk management is not passively to take risks， but actively to prevent and control risks. Risk management can significantly reduce the risk loss and provide compensation for the risk loss to make more social resources and funds reasonably flow to the desired sectors. Petroleum operations have a large investment， long period and high risk， which determine risk management are required for them. Although the risks of petroleum operations are very complex， as long as petroleum enterprise can identify risk's causes， characteristics， and nature， to some extent， it can prevent and control risks. Petroleum enterprise should improve risk management， establish risk prevention mechanism and risk processing system with their own actual situations to make the efficient use of funds and optimize the industrial structure of petroleum and natural gas.

Reference

[1]Sholarin E. A. （2007）， “Applying Integrated Project-Management Methodology to Hydrocarbon-Portfolio Analysis and Optimization”.

[2]Büyük zkan， G.， & G rener， A. （2015）. Evaluation of product development partners using an integrated AHP-VIKOR model. Kybernetes， 44（2）， 220-237.

[3]Opricovic， S.， and Tzeng， G.H.， 2004. Compromise solution by MCDM methods： A comparative analysis of VIKOR and TOPSIS. European Journal of Operational Research， 156（2）： 445-455.