The business process and structure which is based on Good Corporate Governance must take into account the identification of risk factor to achieve better performance with minimal risk. The following are some risks that may negatively impact business activities of the Company.
a) Business Competition Risk
The Company have competitors from domestic and foreign companies engaged in the same industry. The failure of the Company in anticipating / looking at the competition may result in the shift of customers to a competitor who is more competitive both in terms of quality service and price, for which the Company always provides the best services to the customers.
b) Foreign Exchange Fluctuation Risk
The Company can be subjected to the risk of fluctuations in foreign exchange rates, especially in the rupiah against the dollar. Fluctuations in foreign current exchange rate will lead to exchange rate losses that may affect its net income. A strategy on the triggering factors of foreign currency movement need to be developed, thus taking it as reference in decision making.
c) Governmental Policy Risk
The oil and gas sector is an industry that depends on government policies, business activities are strictly regulated by the government through various regulation. In the oil and gas sector some policies that may affect towards the Company’s business activities include revocation of permits held and revocation of mining concession. To reduce the risk of changes in government regulation, the Company constantly up dates the policy improvements by being proactive.
d) Payment Risk
The Company will incur a loss arising from their customers or clients that halt or fail to pay the project cost. This will increase the cost of fund and non performing loan. The Company always mitigates the payment risk by reviewing payments by customers regularly.