Risk factors in oil and gas construction projects in developing countries: a case study

2019 ◽  
Vol 13 (4) ◽  
pp. 846-861 ◽  
Author(s):  
Mukhtar A. Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Developing Countries ◽  
Construction Projects ◽  
Oil And Gas ◽  
Test Method ◽  
Content Type ◽  
Oil Companies ◽  
Gas Processing ◽  
The Impact

Purpose This study aims to investigate the risk factors in construction projects in oil and gas processing facilities in Yemen and serves as a case study for developing countries. Design/methodology/approach By using a questionnaire, data were collected from 201 project managers and engineers employed in different sectors in the oil and gas industry in Yemen. Findings The survey analysis based on Kruskal–Wallis test method shows a high degree of agreement on the perceptions of risk factors depending on categories of companies. In other words, the tested risk factors exist in all sectors of oil companies in Yemen and are valid as a measure of risk factors in construction projects in oil and gas organizations in general. Although no evidence suggests that the risk factors differ significantly according to job title, the result of identifiable risk factors according to experience shows a statistically significant difference among participants in terms of their experience. The relative importance of the ranking of risk factors was obtained by the statistical analysis of responses on the impact and likelihood of occurrence of these risks. Findings show that internal risks are the greatest influential factors in construction projects in the oil and gas sector, followed by changes during construction project, government instability, incorrect project cost estimation, government delay in decision making, incorrect project schedule estimation, and political situation and war in the country. Originality/value These findings are valuable to organizations that are planning to conduct construction projects for oil and gas processing facilities in Yemen and other nations with similar environments, such as developing countries.

Structural modelling of internal risk factors for oil and gas construction projects

2020 ◽  
Vol 14 (5) ◽  
pp. 975-1000
Author(s):  
Mukhtar A. Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Oil And Gas ◽  
Project Success ◽  
Partial Least Square ◽  
Oil Field ◽  
Path Coefficient ◽  
Content Type ◽  
Oil Companies ◽  
The Relationship

Purpose Project failure is the result of one or a combination of several causes of risk factors that are very important to identify for effective performance. This study aims to focus on studying the fundamental relationship between internal risk factors and the negative effect on oil and gas project success in Yemen using the partial least square structural equation modelling (PLS-SEM) method. Design/methodology/approach Data collection was carried out using a formal questionnaire survey of the oil field sector in Yemen by companies involved in mega-oil and gas construction projects. A hierarchical model for determining causative internal risk factors and their effects was developed and evaluated using SEM method by SmartPLS3 software technology. Findings The findings of analyzing model indicate that all categories have a significant effect on project success, while the most significant affected categories in the internal risk factors are project management factors, feasibility study-design and resources-material supply with a path coefficient value of 0.213, 0.197 and 0.186, respectively. Moreover, for the hypotheses test, the positive relationship means that all experimental hypotheses are accepted according to path coefficient value analysis. In addition, the internal risk factors research model shows the ranking of effects on project success starting with project stoppage (loading factor 0.841), cost overruns (loading factor 0.818), time overruns (loading factor 0.726) and project target failure with loading factor 0.539. Research limitations/implications The research was limited to the oil and gas construction projects in Yemen. Practical implications Interpreting the relationship between internal risk factors and their impact on the success of construction projects in the oil and gas sector will assist project team and oil companies in developing risk response strategies and developing appropriate plans to mitigate the effects of risks, which is presented in this paper. Originality/value The paper explains the relationship between cause and effect of internal risk factors in oil and gas projects in Yemen, and is expected to be a guideline for the oil companies and future academic research in the risk management area.

Theoretical review on critical risk factors in oil and gas construction projects in Yemen

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mukhtar A Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Risk Factor ◽  
Literature Review ◽  
Construction Projects ◽  
Oil And Gas ◽  
Project Success ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Content Type ◽  
Oil And Gas Sector

PurposeThe oil and gas construction projects are affected negatively by the drop in oil price in recent years. Thus, most engineering, procurement and construction (EPC) companies are opting to optimize the project mainly to mitigate the source of risks in construction to achieve the project expectation. Risk factors cause a threat to the project objectives regarding time, cost and quality. It is additionally a vital component in deviating from the client's expectation of productivity, safety and standards. This research aims to investigate the causes of risk in the oil and gas construction projects in Yemen.Design/methodology/approachA comprehensive literature review from various sources including books, conference proceedings, the Internet project management journals and oil and gas industry journals was conducted to achieve the objectives of this study. This initial work was predicated strictly on a literature review and the judgments of experts to develop the risk factor framework for the oil and gas construction projects in Yemen.FindingsThe authors found a few studies related to risk factors in oil and gas construction projects and shared a similar view about general construction projects. However, only a fraction of the factors accepted have included the variances of other studies on a regional basis or specific countries, such as the Yemen situation, due to the differences between the general construction industry and oil and gas industry. Moreover, the factors of these attributes were still accepted due to their applicability to the oil and gas industry, and no significant variances existed between countries. Research has indicated that 51 critical factors cause risks in the oil and gas construction projects in Yemen. Such risk factors can be divided into two major groups: (1) internal risk factors, including seven critical sources of risks, namely client, contractor, consultant, feasibility study and design, tendering and contract, resources and material supply and project management; and (2) external risk factors, including six sources of critical risk factors, namely national economic, political risk, local people, environment and safety, security risk and force-majeure-related risk factors. A risk factor framework was developed to identify the critical risk factors in the oil and gas construction projects in Yemen.Research limitations/implicationsThis research was limited to the oil and gas construction projects.Practical implicationsPractically, this study highlights the risk factors that cause a negative effect on the success of oil and gas construction projects in Yemen. The identification of these factors is the first step in the risk management process to develop strategic responses for risks and enhance the chances of project success.Social implicationsThe identification of risks factors that cause the failure of construction projects helps develop response strategies for these risks, thereby increasing the chances of project success reflected in the oil and gas sector, which is a main tributary of the national economy in developing countries.Originality/valueThis research is the pioneer for future investigations into this vital economic sector. Given the lack of resources and studies in the field of construction projects for the Yemeni oil and gas sector, the Yemeni government, oil companies and researchers in this field are expected to benefit from the results of this study. The critical risk factors specific to the oil and gas construction projects in Yemen should be further investigated with focus only on Yemen and its oil and gas industry players.

scholarly journals ANALYSING DELAY IMPACT FROM POTENTIAL RISK FACTORS ON PROJECT DELIVERY OF OIL AND GAS PIPELINE: A CASE STUDY IN IRAQ

2021 ◽  
Vol 2 (2) ◽  
Author(s):  
LAYTH A KRAIDI ◽  
Raj Shah ◽  
Wilfred Matipa ◽  
Fiona Fiona Borthwick
Keyword(s):  
Risk Factors ◽  
Oil And Gas ◽  
Risk Mitigation ◽  
Mitigation Measures ◽  
Project Delivery ◽  
Analysis Framework ◽  
Potential Risk Factors ◽  
South Of Iraq ◽  
The Impact

The aim of this paper is to present the design and specifications of an integrated Delay Analysis Framework (DAF), which could be used to quantify the delay caused by the Risk Factors (RFs) in Oil and Gas Pipelines (OGPs) projects in a simple and systematic way. The main inputs of the DAF are (i) the potential list of RFs in the projects and their impact levels on the projects and the estimated maximum and minimum duration of each task. Monte Carlo Simulation integrated within @Risk simulator was the key process algorithm that used to quantify the impact of delay caused by the associated RFs. The key output of the DAF is the amount of potential delay caused by RFs in the OGP project. The functionalities of the developed DAF were evaluated using a case study of newly developed OGP project, in the south of Iraq. It is found that the case study project might have delayed by 45 days if neglected the consideration of the RFs associated with the project at the construction stage. The paper concludes that identifying the associated RFs and analysing the potential delay in advance will help in reducing the construction delay and improving the effectiveness of the project delivery by taking suitable risk mitigation measures.  

scholarly journals Construction Risks in Developing Countries: A Vietnam Case Study

2020 ◽  
Vol 12 (1) ◽  
pp. 30-49
Author(s):  
Nguyen Le ◽  
Oswald Chong ◽  
Kenneth Sullivan
Keyword(s):  
Risk Factors ◽  
Developing Countries ◽  
Construction Projects ◽  
Rank Order ◽  
Extensive Literature ◽  
Cost Overruns ◽  
Legal Information ◽  
Financial Difficulties ◽  
Common Risk Factors

Most construction projects in the developing countries are marred with delays, cost overruns and low satisfaction levels. This paper focuses on analysis of the data collected from a survey that include the twenty-three (23) common risk factors that cause non-performance in construction projects in developing countries. The factors were consolidated from an extensive literature review, and inputs were solicited from 103 construction practitioners in Vietnam. The study reveals the top five risk factors as the bureaucratic administrative system, financial difficulties of owner, slow payment of completed works, poor contractor performance, financial difficulties of contractor. Spearman’s rank-order correlation tests determined no significant differences between the participating groups. Factor analysis explored the correlations among the risks and yielded four outcomes – Lack of Site and Legal Information, Lack of Capable Managers, Poor Deliverables Quality, and Owner’s Financial Incapability. The findings lay the foundation for stakeholders in the developing countries’ construction industry to better plan and manage the risks for their projects and investment and develop innovative solutions to improve their construction project performances.

A framework for interactive risk assessment in projects: case study of oil and gas megaprojects in presence of sanctions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amir Farmahini Farahani ◽  
Hosein Didehkhani ◽  
Kaveh Khalili-Damghani ◽  
Amir Homayoun Sarfaraz ◽  
Mehdi Hajirezaie
Keyword(s):  
Risk Factors ◽  
Oil And Gas ◽  
Analysis Method ◽  
Interpretive Structural Modeling ◽  
Content Type ◽  
Cause And Effect ◽  
Interactive Network ◽  
Technical Risk ◽  
Project Risks

Purpose This study aims to investigate the interactive network of risk factors in the construction and preparation project of gas condensate storage tanks in the presence of sanctions. Design/methodology/approach First, this paper determines and weighs the project goals using the stepwise weight assessment ratio analysis method. Then, this study identifies and categorizes the project risks and form the network of the project risk factors based on the weight of the project goals by using interpretive structural modeling and decision-making trial and evaluation laboratory techniques. Findings The results of the current work divide the risks of such projects into five financial, technical, managerial and contractual, social and environmental and political categories. The analyzes indicate the complicated risk network and the cause-and-effect interactions between the risks. The findings identify the financial and political risk clusters as the most effective category and select the technical, managerial and contractual and social and environmental risk clusters as the most affected categories. The technical risk has the least important among the others under the sanction conditions. Originality/value This paper model the domino effect of the risk factors considering the complicated interactions and the cause-and-effect relations in a network. Moreover, this study discusses the importance of the risk factors in oil and gas megaprojects in the presence of sanctions. Finally, this paper applies the proposed approach to a real case study in the field of gas projects.

Development of a benchmarking model for BIM implementation in developing countries

2019 ◽  
Vol 26 (4) ◽  
pp. 1210-1232 ◽  
Author(s):  
Timothy O. Olawumi ◽  
Daniel W.M. Chan
Keyword(s):  
Developing Countries ◽  
Construction Projects ◽  
Developed Countries ◽  
Information Modeling ◽  
Content Type ◽  
Developed Economies ◽  
Adoption And Implementation ◽  
Building Information ◽  
Project Organizations

Purpose The purpose of this paper is to explore building information modeling (BIM) implementation and practices in developed economies by developing a benchmarking model that will enhance BIM adoption and implementation in developing countries. Design/methodology/approach The research design adopted a qualitative approach which includes the desktop review of the extant literature as well as case study reviews of ten BIM projects using an explanatory case study technique to form the foundation upon which the study proposed the model. The moving basis heuristics technique was adopted to develop the scoring system. Findings The BIM benchmarking model and assessment template were developed which consisted of three-level concepts modeled to aid project organizations and project team in developing countries to assess and score the level of improvement and implementation of BIM in a project. A desktop review of BIM projects in developed countries demonstrated the significant improvements and benefits possible through the implementation of the established BIM benchmarking model. Practical implications The assessment template in conjunction with the benchmarking model is useful for a comparative evaluation of similar BIM projects and benchmarking purposes. The study also discussed how current findings extends and contradicts previous findings. Originality/value The findings have provided policymakers, construction stakeholders and professional bodies in the construction industry in developing countries with valuable insights and counter-intuitive perspective that could facilitate the uptake of BIM in construction projects.

Developing a taxonomy of transportation waste in construction production processes

2018 ◽  
Vol 8 (5) ◽  
pp. 434-448 ◽  
Author(s):  
Cristina Toca Pérez ◽  
Dayana Costa
Keyword(s):  
Construction Projects ◽  
Waste Minimization ◽  
Construction Sites ◽  
Content Type ◽  
Improvement Plan ◽  
Production Processes ◽  
Efficiency And Effectiveness ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to present a taxonomy of transportation waste in construction production processes based on lean construction (LC) principles. Design/methodology/approach The research methodology used is case study and the main stages for the identification of the transportation waste in two construction projects were: mapping physical flows; measurement of transportation time; and monitoring of transportation waste events; assessment of the taxonomy. Findings The main contribution of this paper is the proposition of a taxonomy of transportation waste in construction production processes through the understanding of the transportation waste causes and consequences. Research limitations/implications Although the literature reviewed addresses sources from different parts of the world, the case studies performed are limited to one country, Brazil. However, the studies were carried out in two different construction sites separated by more than 3,000 km. Practical implications All data collected during the taxonomy application can be organized in order to develop an improvement plan. Moreover, if data collected is disseminated, there is the potential to increase the efficiency and effectiveness of the construction sector. Social implications Although the paper does not explore in depth the impact of the study on society or policy, the theme of waste minimization is focused on cost reduction, and one way to do that is through the flow management for waste minimization. Originality/value The paper discusses the concept of transportation waste of production in construction based on LC philosophy, through the understanding of its causes and consequences.

scholarly journals Capturing the Impact of COVID-19 on Construction Projects in Developing Countries: A Case Study of Iraq

2022 ◽  
Vol 38 (1) ◽  
Author(s):  
M. K. S. Al-Mhdawi ◽  
Mario P. Brito ◽  
Mohamad Abdul Nabi ◽  
Islam H. El-adaway ◽  
Bhakti Stephan Onggo
Keyword(s):  
Developing Countries ◽  
Construction Projects ◽  
The Impact

Political risk management of foreign direct investment in infrastructure projects

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Weiling Jiang ◽  
Igor Martek ◽  
M. Reza Hosseini ◽  
Chuan Chen
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Risk ◽  
Infrastructure Projects ◽  
Content Type ◽  
The Impact ◽  
Whole Life Cycle

Purpose Foreign direct investment in the infrastructure (FDII) of developing countries has a history of at least four decades. Bullish demand for foreign infrastructure services in developing countries, in combination with unstable political environments, has buoyed attention in political risk management (PRM). Even so, research into PRM of FDII remains fragmented and unmapped. Thus, the purpose of this paper is to identify the current body of knowledge in this area, uncover deficiencies and lay the foundation for further practical PRM research in FDII. Design/methodology/approach This paper offers a bibliometric-qualitative review of current literature on political risk in foreign infrastructure in developing countries. A 36-year period is identified, from 1983 to 2018. Publication year, area of focus, author(s), institution and country are classified and analyzed through the medium of social network analysis. The tools used are VOSviewer, CiteSpace and Gephi to analyze citation networks of 345 published papers. Out of 345 papers, 94 highly related studies were selected for further content analysis. Findings The study identified the research trends in related areas of PRM in infrastructure (e.g. PRM in international construction and foreign direct investment) by bibliometric analysis, which includes scattered researcher collaboration, wide-ranging and unfocused journal selection, unsystematic and discontinuous research themes. The specific research weakness in PRM in FDII is recognized by qualitative analysis from the perspective of PRM process, which reveals a lack of understanding of the impact of political risk factors, subjective risk estimations, lacking application of mature political risk database in FDII, combined with a shortage of complete and effective strategies for PRM in FDII in developing countries. Originality/value This paper is the first of its kind, providing a comprehensive benchmark survey of the research to date in PRM in foreign infrastructure investment in developing countries. It proposes a framework of future research agenda on PRM in FDII, including special issues on this topic, identification and assessment of political risk factors with objective methods, proposition of PRM strategies on FDII with proactive and active approaches, completing strategies of PRM with reactive strategies from the perspectives of whole life cycle of infrastructure projects, political risk factors and stakeholders. It also addressed the need to investigate the suitable literature databases for researching in this area.

Using probability impact matrix (PIM) in analyzing risk factors affecting the success of oil and gas construction projects in Yemen

2019 ◽  
Vol 14 (3) ◽  
pp. 527-546
Author(s):  
Mukhtar A. Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Oil And Gas ◽  
Project Success ◽  
Risk Matrix ◽  
Content Type ◽  
Factors Affecting ◽  
The Matrix ◽  
Oil And Gas Sector ◽  
Very High

Purpose This study aims to identify and assess the significant risks in Yemen oil and gas construction projects based on their risk rating (impact and probability) by using probability–impact matrix (PIM). Design/methodology/approach In total, 51 risk factors that might affect construction projects in the oil and gas sector are defined through a detailed literature review and expert judgment. The risk factors were tabulated in a questionnaire form, which was sent to a total of 400 participants asking their contribution in identifying the risk matrix for the risk factors in terms of impact and probability of occurrence during the project life cycle. Five zones were used in the matrix according to the degree of risk factor’s severity on the success of the project. These zones are light green, dark green, yellow, light red and dark red. Findings The PIM analysis for risk factors found that five factors are located in the dark red zone, as top risks factors have a very high impact and very high probability of occurring; 40 factors are located in the light red zone; six factors are located in the yellow zone; and no factors are located in the green zone (light and dark), which is considered an indication of the importance of risk factors under study and their impact on the success of construction projects in the oil and gas sector. Moreover, the factors under feasibility study and design and resources and material; are the most categories effect on project success. Research limitations/implications The research was limited to the oil and gas construction projects in Yemen. Practical implications Practically, this study highlights the top risk factors in oil and gas construction projects, which might cause an adverse effect on project success in Yemen. Classification and ranking of these factors by using the risk matrix provide the basis for risk response planning to enhance the chances of project success. Originality/value This paper identifies the matrix for risk factors affecting the success of construction projects in the oil and gas industry in Yemen. There is a significant contribution expected from this research, especially for companies operating in the oil and gas sector and other organizations that plan to invest in this field, in addition to expected benefits for the Yemeni Government and researchers because of lack of research in this area.

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