Controlling refinery risk management

Abstract

The purpose of this paper is to explore the determinants of internal control and propose techniques that can be utilized by the crude oil refiner in designing, implementing and controlling a pro-active risk management program.

Since the introduction of volatility into the oil business in the mid-1970s, pro-active risk management the has become a popular tool for petroleum industry management to effectively reduce the firm1s exposure to price risk. In order to use pro-active techniques, one must thoroughly understand the nature of the business and the tools available. Pro-active risk management is a continuous process of pricing, buying, selling, trading and scheduling of various products to balance supply and demand.