This paper firstly defined construction contract risk and the foreseeable risk principle on the basis of the risk s meaning.

According to main manifestation of engineering contract risk, risk prevention in contract management and rational order of risk distribution,the author analyzes risk management of engineering contract,and proposes the methods to avoid and distribute risks in concrete project contract management from the angle of applicability,in order to promote well development of construction enterprise.

The main works of contract risk analysis are identification of these risks, effective reduction and avoidance of contract risk by way of effective countermeasures with appraisal of contract on contractor organization.

When the construction contract is prepared, all the issues discussed in this paper should be reasonably considered for the proper definition of the contract risks and lowering the probability of arising disputes because of the defects of the contract.

The explanation focuses on the division of risk types about engineering contract of petroleum construction enterprises, coupled with the precaution measures and countermeasures of contract risks about oil construction installing projects.

In this paper, the value at risk (VAR) method used in the fields of financial risk assessment is introduced, the risk factors, threat, vulnerability, and assets are analized, and a risk quantification model and the method of calculating VAR are proposed.

The proposed method described risk quantification method by identifying and quantifying the significance of assets and the criticality of threats from the behaviors of entities,and designed trust computation methods based on the quantified risk.