Contract Development Strategy in Reducing the Risk with House of Risk Method in Pt. KLO (Case Study Oil&Gas Company In Indonesia)

Abstract

Contract development of procurement process at Oil Company as PT. KLO should follows many regulations of contract development. At the other side, there are some near misses/failure contracts because of unable to anticipate the risk earlier. There is no research to categorize the risk order and strategy to mitigate the risk. This research aim is to identify risk events, identify risk agents, and mitigation strategy of contract development process with House of Risk (HOR) method. The core of supply chain process to make contract already analyzed to identify the risk potential and effect resulted. Risk agents and related probabilities also already analyzed. Aggregate of risk potential was defined for each risk agents to know the damage level. This method was applied at department of contract & buying of PT. KLO Company, one biggest operator of oil and gas exploration in Indonesia through cooperation with Oil and Gas institution of Indonesia Republic (SKK Migas). The research findings identify thirty four (34) risk agents and twelve (12) the main mitigation actions that significantly effective to reduce the contract making risks in PT. KLO

Keywords: contract making, risk cause, House of Risk, regulation of goods procurement