Oil and gas project management and success: a critical evaluation of oil and gas project management success in Australia
Cornelius Ikediashi A C and Bassam Bjeirmi BA 11 Erden Court, Melton West, Vic. 3337, Australia.
B The Scott Sutherland School of Architecture and Built Environment, Robert Gordon University Aberdeen, AB10 7GJ.
C Corresponding author. Email: cornel02ng@yahoo.com
The APPEA Journal 59(1) 82-89 https://doi.org/10.1071/AJ18056
Submitted: 25 November 2018 Accepted: 12 March 2019 Published: 17 June 2019
Abstract
Australia remains in pole position to become the world’s leading exporter of liquefied natural gas (LNG) and the number one exporter in the future. Maintaining this trajectory will require the oil and gas industry in Australia to remain competitive in project delivery to continue to attract investments. Yet, the Australian project delivery environment poses a big threat to this trajectory. Several research studies, organisations and institutions have come up with a long list of generic factors contributing to project management success and failure. The aim of this study is to examine oil and gas projects in Australia with a view to ascertain their success or otherwise and the specific contributing factors. This study has used a qualitative method of research by examining secondary sources of information on four recent Western Australia LNG projects (Gorgon, Wheatstone, Prelude and Ichthys) and presenting them as case studies. Specifically, the research has used mostly online sources that are either independent reports or information sourced from company websites. The key findings suggest that major oil and gas projects in Australia fail, and that failure or success is determined by the ability of the project management team to deliver the project on budget and on schedule. This is exemplified by the projects examined in this study, which have all shown cost and schedule overruns. Six critical factors are observed as contributing to cost and schedule overrun: project location, high cost of executing projects in Australia versus overseas, skills shortages, overseas manufacturing, project complexity and cultural and environment issues. Innovation, collaboration and standardisation, as adopted from other regions, are the initial practices suggested for the Australian industry to overcome all six factors and encourage further investment.
Keywords: case studies, critical factors, floating liquefied natural gas, FLNG, liquefied natural gas, LNG, project management failure.
Cornelius Ikediashi is a Geologist, certified PRINCE2 practitioner, brand and marketing specialist and a trained energy sector Commercial Practitioner. He is a hard-working, self-motivated individual with initiative, resourcefulness and enthusiasm. His dynamic business and academic experience cuts across different industries. He holds a BSc in Geology, an MBA in Marketing and a Msc in Commercial Practice for the energy sectors from the Robert Gordon University, Aberdeen, Scotland. His industry experience spans various sectors, from fast-moving consumer good, to mining, to banking. He is a seasoned brand and product management specialist with years of experience in brand and marketing management, including nurturing and building different brand portfolios. His background as a Geologist keeps driving him towards the energy industry. He recently collaborated with Dr Bassam on a research project that examined the factors contributing to the success or otherwise of oil and gas projects in Australia. He currently lives in Victoria, Australia and can be contacted at cornel02ng@yahoo.com. |
Bassam Bjeirmi has an extensive experience in the development and delivery of training programs for the private and public sectors. His main subject area is construction and generic project management, where he has delivered training programs in the UK and overseas for companies including Shell, Sonatrach and ADNOC in Nigeria, Algeria and the Arabian Gulf, respectively. Over the years, he has provided consultancy to several public and private organisations on project implementation, monitoring and control. His other areas of experience include the capture of knowledge, its dissemination and its effect on organisational learning. Bassam had comprehensive tertiary level education experience in the roles of tutor, module leader and researcher. He has considerable experience in supervising research projects both at postgraduate and PhD level, and he is a referee for several industry journals. His current research interests include the role of project management in knowledge creation and learning, client operational style and its effect on contractors’ abilities to innovate, leaders and learning within organisations and project management competencies for the energy sector. He can be contacted at b.bjeirmi@rgu.ac.uk. |
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