"At a time when the energy industry is very sensitive to geopolitical risk, that's no easy feat."

"We recognize that some geopolitical risks need to be resolved," Mr. Hagstrom said.

The first step in analyzing geopolitical risks is identifying risks through information gathering and early warning systems.

Companies can mitigate geopolitical risks through keeping an open mind, having a nimble organizational structure, planning for vastly different scenarios, and purchasing political risk insurance.

Thus there is virtually no geopolitical risk in using any of these sources.

He said he was mystified that investors seemed to think that success in Iraq could remove geopolitical risks from the investment equation.

Indeed, some investors consider themselves virtually immune to geopolitical risks.

I like what I've seen in terms of the improvements on the operational side," he added, "but there are challenges like the heightened geopolitical risk.

The heightened geopolitical risk has translated into higher prices, something analysts call a "risk premium."

"Clearly, geopolitical risk is an element in looking at risk in this industry," he said.