Risk Management On10Million Tons Of Fuel Ethanol Projects Of Qingzhou Sinopec

Risk Management on the base of risk identification, assessment and scientificanalysis, it offers the possibility for the management who disposal the riskcomprehensive and reasonable by use various measures, it is a science and directmethod for modern risk management. The author engaged in the management ofvarious projects for a long time, and he recognized the importance of riskmanagement more and more urgent in the work of engineering projects. It is the onlyway to avoid and control the risk to maximize in the projects, and can increase thepossibility to success of the project.10million tons of fuel ethanol projects of Qingzhou Sinopec is a major projectwhich is actively promoted and vigorously introduced by Qingzhou government.Because of the dual pressure about the increasing depletion of fossil fuels and thegrowing environmental pollution, renewable energy alternative to fossil energysources becomes a tendency. Fuel ethanol produced by the sweet potato as rawmaterial, it is not compete with people foe the food, and not compete with the food forthe earth. Meanwhile, the emissions after use are clean and no pollution. With thedevelopment of related technology of fuel ethanol, the construction and operationconditions of fuel ethanol project are matured. Qingzhou completed the first province-wide fuel ethanol project which annual output of10tons, it gives priority to occupythe forefront of energy development and the heights of fuel ethanol market, and thereis a great theoretical value of the promotion and economic and social benefits.Meanwhile, the construction and operation of this project can increase the governmentrevenue effectively, provides numerous job opportunities, increase the farmer’sfortunes who plant the sweet potato. It has a significant role in building new socialistcountryside for Qingzhou city. Therefore, to study the project’s risk management canidentify, evaluate the risks faced in fuel ethanol projects effectively, so that we cantake appropriate measures for risk management and it can ensure the progress of thisproject.In this paper, we established a risk assessment model in study the RiskManagement of10tons fuel ethanol project of Qingzhou Sinopec. We conducted apreliminary identification about the risks we will face in this project by Delphimethod, and then concluded that the market risk, operational risk and environmentalrisk are the main risks facing in this project. On this basis, we calculated the riskweight, measured the size of the risk level, sorted of various risk factors about themain risks by use Analytical Hierarchy Process (AHP), and then we found that themarket risk is the significant risk for this project, other risks are the generally or notsignificant risks. We made a detailed analysis for the market risk, used the cash flowanalysis, breakeven analysis, sensitivity analysis method to analysis the riskassessment, and then we found that the cash flow is profitable, break-even point insafe condition, the market prices is sensitivity about this project. We gave thecorresponding measures and methods for the risk control one by one on the basis ofrisk identifications and risk analysis. Finally, we summarized the achievements andshortcomings of the risk management study in this project.This paper used qualitative and quantitative methods to analyze and identify risk,and summed up the basic methods of project risk management. It is undoubtedly animportant guiding significance about establish awareness of investment risks, use the correct relevant theories and methods to identify and assess project risk, and then findout the basis method to control risk, to maximize the realization of the project target.