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.

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.

Assessment of the effect of external risk factors on the success of an oil and gas construction project

2020 ◽  
Vol 27 (9) ◽  
pp. 2767-2793
Author(s):  
Mukhtar A Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Oil And Gas ◽  
Project Success ◽  
Construction Project ◽  
Equation Modeling ◽  
Content Type ◽  
External Risk ◽  
The Relationship ◽  
Oil And Gas Sector

PurposeConstruction projects in the oil and gas sector are greatly affected by external risk factors, especially those related to the economy, politics, security and stability factors. Hence, this research aimed to investigate the fundamental relationship between the external risk factors and their effects on the construction project success using Structural Equation Modeling method and PLS-SEM approach.Design/methodology/approachData collected through a structured survey distributed to projects teams in the oil and gas sectors in Yemeni companies involved in mega construction projects. A hierarchical model for assessing causative external risk factors and their effects on project success was developed and analyzed using Smart PLS 3 software of SEM.FindingsThe findings showed that economic, political, force majeure and security-related risk factors had a strong effect on project success. Besides, the Coefficient of Determination (R-squared value) equals 0.743, represented the proportion of variation in the dependent variable(s), which can be explained by one or more predictor variable. Moreover, the predictive relevance value Q2 is 0.375 above zero, which indicates that the conceptual model can predict the endogenous latent constructs. The calculated Goodness of Fit (GoF) Index of the model was 0.699, which shows that the developed model had substantial explanatory power to represent the relationship between the cause of external risk factors to and the effect on construction project success.Research limitations/implicationsThis research was limited to the oil and gas construction projects in Yemen as case study.Practical implicationsPractically, this study highlights the external risk factors that cause a negative effect on the success of oil and gas construction projects in Yemen. The research model of these factors is the first step in the risk management process to develop strategic responses for risks and explain the relationship between cause and effect on project success.Social implicationsThe model of external 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/valueThere is a need to improve the planning of economic and security performance as well as to mitigate political risk factors effects on project success and other risk factors discussed in this study, which effect on construction project success according to their priorities.

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.

Critical areas of knowledge loss when employees leave in the oil and gas industry

2018 ◽  
Vol 22 (7) ◽  
pp. 1573-1590 ◽  
Author(s):  
Muhammad Saleem Sumbal ◽  
Eric Tsui ◽  
Ricky Cheong ◽  
Eric W.K. See-to
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Field ◽  
Gas Industry ◽  
Knowledge Loss ◽  
Content Type ◽  
Types Of Knowledge ◽  
Critical Areas ◽  
Oil And Gas Sector ◽  
Geographical Locations

Purpose The purpose of this paper is to investigate the critical types of knowledge lost when employees depart companies in the oil and gas field. Design/methodology/approach The study adopts a grounded theory methodology. Twelve semi-structured interviews were conducted with elite informants in the oil and gas sector to gain an in-depth insight into the research problem. ATLAS.ti was used for data analysis and coding. Findings In the oil and gas industry, employees generally have job rotation and work at various geographical locations during their career. The departing employees possess valuable types of knowledge depending on the role and duties they have performed over the years. These include specialized technical knowledge, contextual knowledge of working at different geographical locations, knowledge of train wrecks and history of company, knowledge of relationships and networks, knowledge of business processes and knowledge of management. Research limitations/implications The study findings might only be applicable to the oil and gas sector. Originality/value This paper fulfills an identified gap on the identification of critical areas of knowledge loss when employees depart from oil and gas companies. The study adds to the existing body of literature on this underexplored area in the knowledge management literature.

Cultural, external and behavioral factors in claims negotiations

2015 ◽  
Vol 9 (4) ◽  
pp. 619-642 ◽  
Author(s):  
Hassan Fazliani ◽  
Chotchai Charoenngam
Keyword(s):  
Construction Projects ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Affecting Factors ◽  
Analytic Hierarchy ◽  
Gas Industry ◽  
Content Type ◽  
Factors Affecting ◽  
High Standards ◽  
Major Factors

Purpose – The purpose of this paper was to investigate the factors affecting the claim negotiations in Iranian oil and gas construction projects. The findings of this paper give better understanding of claim negotiations in Iranian oil and gas projects. Design/methodology/approach – The research methodology for this study involved the use of Delphi technique, conducted with non-Iranian stakeholders being involved in Iranian oil and gas construction projects more than five years and determined the major factors, affecting claims negotiations. Subsequently, factors’ weightings were derived using analytic hierarchy process (AHP). Findings – In total, 13 affecting factors identified in three categories of: external, cultural and personal behavioral. Finally, the weights of factors were identified. Research limitations/implications – This research was conducted in the context of Iranian oil and gas projects. This industry has high standards and its employees are well chosen and have frequent in job training. All these affect the organization, working and people’s culture and behavior compared to other sectors of construction business. Therefore, the results of this research are specific to the oil and gas industry. Practical implications – The findings of this paper can be considered as a practical guide for dealing with Iranian counterparts during claims negotiations to ensure amicable settlement. Also, it is useful for Iranian stakeholders to have better understanding of concerns of non-Iranian stakeholders. Originality/value – The paper is the original work of the authors, and to the best of the authors’ knowledge, this paper has for the first time introduced the factors affecting claims negotiations. The findings of this paper provide useful insight into effective claims negotiations of Iranian oil and gas projects.

scholarly journals Safety coaching: a literature review of coaching in high hazard industries

2015 ◽  
Vol 47 (4) ◽  
pp. 195-200 ◽  
Author(s):  
Jonathan Passmore ◽  
Victoria Krauesslar ◽  
Rachel Avery
Keyword(s):  
Literature Review ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Research Literature ◽  
Gas Industry ◽  
Content Type ◽  
High Hazard ◽  
Offshore Oil And Gas ◽  
Offshore Oil ◽  
Practical Implications

Purpose – The purpose of this paper is to critically review the research literature on safety coaching, with a particularly focus towards work in safety critical environments such as oil and gas, manufacturing and driving. Design/methodology/approach – A literature review was undertaken of existing research, specifically in high-hazard industries, to assess whether safety coaching could be applied in the offshore oil and gas industry. Findings – The paper suggests that coaching may offer some potential in helping support learning, behaviour change and is consistent with feedback and development approaches used in behavioural-based safety. Research limitations/implications – Further research would be needed to test the value of coaching to this new environment. Practical implications – The paper informs practice on the development of coach training for safety coaching offshore. Originality/value – The paper offers a new understanding of the potential of safety coaching in a new area of practice.

Knowledge retention and aging workforce in the oil and gas industry: a multi perspective study

2017 ◽  
Vol 21 (4) ◽  
pp. 907-924 ◽  
Author(s):  
Muhammad Saleem Sumbal ◽  
Eric Tsui ◽  
Eric See-to ◽  
Andrew Barendrecht
Keyword(s):  
Old Age ◽  
Oil And Gas ◽  
Oil Prices ◽  
Oil And Gas Industry ◽  
Knowledge Retention ◽  
Aging Workforce ◽  
Gas Industry ◽  
Content Type ◽  
Oil And Gas Sector ◽  
Geographical Locations

Purpose The purpose of this paper is to investigate how companies are handling the issue of knowledge retention from old age retiring workers in the oil and gas sector. This is achieved by providing a detailed insight on the challenges and strategies related to knowledge retention through study of companies from different geographical locations across the globe. Design/methodology/approach The study adopts a qualitative research methodology and 20 semi-structured interviews, with open-ended and probing questions, were conducted to gain an in-depth insight into the knowledge retention phenomena. Findings Knowledge retention activities tend to be inconsistent in majority of the oil and gas companies, with not much work being done regarding knowledge loss from old employees, partly because of the fall in oil prices and layoffs. Oil prices turn out to be a decisive factor in oil and gas industry regarding workforce and knowledge retention activities. The political situation and geographical locations of the companies also affect the knowledge retention activities. Moreover, the aging workforce and retirement issue is more acute in the upstream sector. Research limitations/implications The focus of the study was on the oil and gas sector, and thus the research results may lack generalizability. Originality/value This paper fulfills an identified need for investigating the issues and challenges of knowledge retention regarding old age retiring employees by taking into account a global perspective and providing a comparison among different companies in different geographical locations.

scholarly journals Causes of delay in the construction phase of oil and gas projects in Malaysia

2018 ◽  
Vol 7 (2.29) ◽  
pp. 203 ◽  
Author(s):  
S Umeesh Kumar Suppramaniam ◽  
Syuhaida Ismail ◽  
Subaashnii Suppramaniam
Keyword(s):  
Literature Review ◽  
Construction Projects ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Initial Study ◽  
Gas Industry ◽  
Comprehensive Literature Review ◽  
Regional Basis ◽  
Project Objectives ◽  
Significant Factors

The drop-in oil price in recent years has seen the oil and gas projects affected negatively. Thus, most Engineering, Procurement, and Construction (EPC) companies are opting to optimise the project especially in terms of mitigating delays in construction to achieve the project expectation. Delay causes threat to a project objectives in terms of time, cost and quality. It is also a crucial element in deviating from the client’s expectation in terms of productivity, safety and standards. This paper aims at examining the causes of delay in the construction phase of oil and gas projects in Malaysia.  A comprehensive literature review from various sources through books, conference proceedings, the internet, project management journals as well as oil and gas industry journals was made to materialise this paper. There were a few studies that related to this problem and shared a similar view with general construction projects, yet only a fraction of the factors was accepted due to the differences between the two industries. Other variances of the papers included on regional basis or on specific countries. The factors of these attributes were still accepted since it was still applicable to the oil and gas industry and there were not any major variances between countries. The paper has found that there are several significant factors that cause delays in the construction phase of oil and gas projects in Malaysia. The similarity of these delay factors can be grouped into six major groups, namely client, contractor, engineering, external, project and resources. This initial study is based purely on literature review, comparison of similar cases, cross referencing and critical judging. The causes of delay specific to the construction phase in oil and gas projects in Malaysia should be further researched with focus only in the Malaysian projects and industry players.  

Trends and Prospects of Development of the Oil and Gas Sector in the Context of Digitalization

2020 ◽  
Vol 26 (1) ◽  
pp. 35-45 ◽  
Author(s):  
A. G. Kazanin
Keyword(s):  
Oil And Gas ◽  
Digital Technologies ◽  
Oil And Gas Industry ◽  
Global Market ◽  
The Arctic ◽  
Business And Society ◽  
Gas Industry ◽  
Exploration And Production ◽  
Oil And Gas Sector

The modern oil and gas industry is heavily dependent on the processes and trends driven by the accelerating digitalization of the economy. Thus, the digitalization of the oil and gas sector has become Russia’s top priority, which involves a technological and structural transformation of all production processes and stages.Aim. The presented study aims to identify the major trends and prospects of development of the Russian oil and gas sector in the context of its digitalization and formation of the digital economy.Tasks. The authors analyze the major trends in the development of the oil and gas industry at a global scale and in Russia with allowance for the prospects of accelerated exploration of the Arctic; determine the best practices of implementation of digital technologies by oil and gas companies as well as the prospects and obstacles for the subsequent transfer of digital technologies to the Russian oil and gas industry.Methods. This study uses general scientific methods, such as analysis, synthesis, and scientific generalization.Results. Arctic hydrocarbons will become increasingly important to Russia in the long term, and their exploration and production will require the implementation of innovative technologies. Priority directions for the development of many oil and gas producers will include active application of digital technologies as a whole (different types of robots that could replace people in performing complex procedures), processing and analysis of big data using artificial intelligence to optimize processes, particularly in the field of exploration and production, processing and transportation. Digitalization of the oil and gas sector is a powerful factor in the improvement of the efficiency of the Russian economy. However, Russian companies are notably lagging behind in this field of innovative development and there are problems and high risks that need to be overcome to realize its potential for business and society.Conclusions. Given the strategic importance of the oil and gas industry for Russia, its sustainable development and national security, it is recommendable to focus on the development and implementation of digital technologies. This is crucial for the digitalization of long-term projection and strategic planning, assessment of the role and place of Russia and its largest energy companies in the global market with allowance for a maximum number of different internal and external factors.

A perfect storm: how high levels of risk and weak internal controls resulted in violations of the foreign corrupt practices act

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Diana Franz
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
International Markets ◽  
Internal Controls ◽  
Strategic Decision ◽  
Department Of Justice ◽  
Gas Industry ◽  
Foreign Corrupt Practices Act ◽  
Content Type ◽  
Perfect Storm

Theoretical basis This case is based on Weatherford International’s settlement with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). Both the SEC and the DOJ were critical of Weatherford for its violations of the Foreign Corrupt Practices Act and for its “inadequate internal controls.” This case explores the Foreign Corrupt Practices Act (FCPA) violations and issues related to internal controls. Research methodology Case study. Case overview/synopsis This case is based on Weatherford International’s settlement with the SEC and the Department of Justice. Weatherford provided equipment and services in the oil and gas industry. Because international markets were growing faster than domestic markets, Weatherford made a strategic decision to pursue growth in international markets. The oil and gas industry has high levels of operating risk as did the countries that Weatherford decided to pursue operations in. However, despite the decision to take on additional risk, Weatherford failed to implement adequate systems of internal controls. The title of the case “A Perfect Storm” refers to Weatherford’s trifecta of operating in an industry with high levels of corruption risk, countries with high levels of corruption risk and failing to implement adequate internal controls despite those high operating risks (Department of Justice, 2013). Weatherford was ultimately assessed a $152m penalty for its violations of the FCPA that included bribery, volume discounts, improper payments and kickbacks. Complexity academic level Undergraduate and graduate auditing classes.

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