result of the first exploration of crude oil in 1956, at Olobiri and from then onwards, crude On the other

hand, financial risks are the risks coming from the capital structure, credit structure, market structure and cost reporting structure of a project. More than 5 ! of projects usuall" double the estimate cost that was forecasted for them at the on set. #$hittaker, 1991 cited in %afra&'abe(a, et al., ) *+

,ri-ate and public sector operators usuall" are affected b" power pressures in the appointment of contractors, sub&contractors and suppliers. in carr"ing out their operations in /igerian oil and gas projects. not on merit but based on whom the" know. #Ogunsemi and 0je, ) 6+ 1herefore, more costs are incurred on projects during design, construction and operation of facilities as a result of initial. poor 2ualit" materials, poor designs, poor construction works, etc. 0lso, high inflation rates, increases in taxation and -ariation in interest rates for bank loans obtained b" these contractors, inhibit the contractors meeting up with project demands with regards to finance. 3n /igeria, the introduction of 45ue ,rocess6 has made pre2ualification of contractors to gain popularit" recentl" with respect to contract award. 1he 5ue process s"stem was formed to reinstate and uphold a transparent, open, and competiti-e federal procurement s"stem that is dri-en with integrit", sustains spending within project budgets and to ensure that the implementation of projects are done within time schedule, so as to achie-e -alue for mone" outcomes without sacrificing 2ualit" and standards #7udget Monitoring and ,rice 3ntelligence 8nit, ) 0je, ) 2.7.6 6+. External and Internal risks: 9 cited in Ogunsemi and

:xternal risks are those risks that originate from a project;s surrounding en-ironment. 1he" can to some extent be calculable but the" are usuall" be"ond the control of a project #uncontrollable+. :xternal risks take se-eral forms and can be broken down further as follows< .1 3nterest rate risk< 1his is a form of financial risk that occurs because changes in interest rates affect the -alue of assets and liabilities on projects. #=oberts, et al, #) >+ 3n /igeria, due to the high inflation rate and the irregularities in the

banking sector, oil and gas projects experience irregular interest rate increases for, loans and bonds recei-ed. 1his generates increases in costs of machineries and e2uipments for construction and production processes midwa" the duration of projects and ma" e-entuall", lead to budget o-erruns on projects. 0lso interest rates ma" rise. .) 1ime&dependent risks< 1hese are risks relating to items that ha-e a fixed time limit on them. 3n /igeria, most oil and gas projects especiall". offshore projects, are usuall" fast track projects. 5esign works usuall" start immediatel" after the suppl" contracts between bu"ers and operators ha-e been confirmed. with the duration of the project fixed within a stipulated time. #Mohammed 0li and ?ouca, ) 9+ More so, when claims are not made within the timescale before the expir" of insurance policies for premiums paid for insurance co-ers on projects, there is e-er" possibilit" that there will be a net profit loss on the project. 0 t"pical example is the 'he-ron 'orporation subsidiar", 'he-ron /igeria ?td. #'/?+, which completed a @float&o-er installation; at Meji Aas Aathering and 'ompression platform #AA',+ on the :scra-os Aas project ,hase >. 3t was the first of its kind, t"pe of platform being constructed in the region because of the schedule ad-antages compared to installing the usual pre&commissioned, integrated and single piece topsides due to the tight schedule deadline of the project. #Bimmons and 5uhane", ) *+

.> 'ompetitor risks< 1hese risks relate to changes with respect to the competition base. 3t could be minor or major changes which impact on companiesCprojects. ?ack of @due processes; in contract award thereb", making the same compan" to be winning most jobs. /:1'O, a subsidiar" of //,'. #//,', ) *+ due to their strong go-ernment ties wins most of the oil and gas design contracts. 1his can make established competitors to decline suddenl" thereb", seriousl" affecting the successful implementation and deli-er" of their projects. .9 :xposure risks< 1hese are risks associated with cases where oil companies or oil and gas projects depend on few -ariables or on onl" a single -ariable for their sur-i-al. Oil and gas projects are usuall" exposed to financial #mortgages, )

insurance premiums+. ph"sical #machines and e2uipment failures+ and human #injuries, ill health and death of staff+ exposure risks. #1chanko-a, ) )+ 1his is because of the ha(ardous nature of the oil and gas products as well as the -olatile nature of the working en-ironment where oil and gas projects are carried out. .5 Bhareholder risks< 1hese are risks associated with cases where a compan" depends on shareholders e2uit" for the operations. 3n /igeria, organi(ed corruption from politicians and soldiers who ha-e looted go-ernment funds to make fortunes ha-e enabled their owning most of the pri-ate indigenous oil and gas companies especiall" in the downstream sector. #:-uleocha, ) 5+ 3f a major shareholder or a considerable amount of shareholders confidence declines in an" of these companies, and heCshe withdraws there shares, there will be a -er" significant and ad-erse effect on the compan";s projects. 3t ma" e-en lead to closing down most of the projects. .6 ,olitical risks< Ao-ernment of a countr" or of rele-ant neighboring countr";s fiscal policies can be a -er" huge source of risk on projects. Multinational oil companies in /igeria usuall" face the risk of changes in interest rates and high taxation which ma" arise due to changes in go-ernment policies. 1hese risks are usuall" managed b" multinational oil companies -ia strategic alliances, insurance and partnering. #7erlin, et al., ) >+ 1he" are also minimi(ed b" maintaining good relationships with the go-ernment, utili(ing local personnel and suppliers as much as possible and e-ading from geographical concentration. 1his enhances a good economic relationship with the host countr" and increases the compan";s chances of anticipating political and economic future changes. .D ?egislati-e risk< 1hese are risks which projects are exposed to because of the fact that, go-ernment constantl" changes old statutes and introduces new statues due to e-er changing legislati-e decisions. 1he new statutes ma" not be fa-orable on a particular project with respect to the project;s en-ironment. 0ccording to the /igerian constitution, all oil, gas and minerals belong to the federal go-ernment. #:-uleocha, ) 5+ Btatutor" re2uirements like en-ironmental legislation, health and safet" legislations, local content legislation, impose direct charges on oil >

companies for making use of landfill waste sites, consuming energ", disposing refuse, flaring gases, oil spillage, etc. e-en though the oil companies claim that there project acti-ities and operations are carried out with high en-ironmental standards. #$orld bank, 1995+ re-eals that the /igerian en-ironmental laws are not strictl" enforced when compared to other international e2ui-alent laws. .* Becurit" risks< 1hese are risks which oil and gas projects are exposed to because of disruption of the project;s operations. Oil and gas amenities, in-ol-ing natural gas and crude oil fields, transportation #railwa"s, trucks, pipelines, and ships+, refineries and distribution s"stems are good targets for criminals and terrorists. #7ajpai and Aupta, ) D+. 1his is because petroleum products are highl" -olatile, highl" flammable, and -er" toxic and contains a lot of energ". 3n /igeria, securit" risks on oil and gas facilities are eminent in the /iger 5elta region, due to disturbances coming from local communities, militants, communit" clashes or wars, etc. =ecentl", there ha-e also been regular cases of 4kidnapping and release6 #:weje, ) D, pp. ))*+ of expatriate oil and gas workers on a week basis both onshore and offshore due to political reasons. 1his has generated international attention which seems to ha-e no solution "et. Mohammed 0li, =.M., #) 9+ re-eals that the intrinsic risk in offshore installations in the upstream sector of oil and gas projects. are conditions relating to explosions and the effects of their occurrence. 1his is because an attack which is successful on an oil and gas facilit" or its transportation s"stem usuall" results in interruption of gas and oil suppl", se-ere economic impact, injur" to staff or public, fatal outcome and shut down of operations. 0ll these ha-e serious economic impact. 1hus, the risks accruing to the intentional acts b" these militants to oil and gas facilities needs to be accessed, and appropriate emergenc" responses and countermeasures need to be put in place. #7ajpai and Aupta, ) D+

On the other hand, internal risks are those risks that originate within a project;s en-ironment. 3nternal risks are usuall" calculable and the project team has some degree of control o-er them. 3nternal risks can be further broken down as follows<

1. Operational process risks< 1hese are risks which projects are exposed to because of staff una-ailabilit", lack of human resources, production capacit" limit being reached on a project, and human errors. 3n /igeria, there has not been a major or se-ere flare incident in an" oil field. 0 flare stack is a long pipe which projects into the air with an ignition s"stem, a flaring arrow or an oil" rag which is hoisted up the stack on a pulle" and cable s"stem. Elares are primaril" used in oilfields for -enting excess gas and pressure build up coming from oil wells which can cause ha(ardous uncertainties and risks. #Bhaluf, ) #) *+ Fohn %ink 'ompan", 5+ states that, the fi-e common cause of flare incidents are< li2uid carr" o-er. 5 cited in Bhaluf, ) *+ Aalbraith, #) *+

internal explosion. s"stem obstructions. ignition loss and fault" maintenance procedures. #Fohn %ink 'ompan", ) also re-eals that, /igeria is the countr" that flares the most gas amongst an" other countr" of the world. $ith this record, effecti-e risk management processes and practices is -ital so as to ensure that the operational process risks which could be generated b" staff #poor maintenance, s"stem obstructions+, and en-ironmental factors #internal explosion due to air pressure+ are put in check on oil and gas fields. ). ?egal risks< 1hese are risks arising from errors in insurance policies and contracts which pro-ide le-els of protection and liabilit" which are not the same as the percei-ed le-els e.g. a sudden change in statute. 0 t"pical example is the 0lien 1ort 'laims 0ct #01'0+ which gi-es 8B district courts jurisdiction for ci-il actions which are committed in -iolation of 8B laws and treaties when -iolations occur in nations outside 8B0. #Gieserman, 1999+ 1his act was used when a group of /igerian citi(ens charged 'he-ron to a federal court in Ban Erancisco, 'alifornia for the deaths of two protesters b" militar" troops and police on 'he-ron; s ,arabe oil platform, nine miles offshore of /igeria on Ma" )5, 199*. 1he" claimed that 'he-ron being onl" interested the profits the" make. damages the li-es and the en-ironment of the local inhabitants. #Olsen, ) )+

>. Buppl" chain risks< 1hese are risks that arise from the acti-ities of the entire suppl" chain #contractors, subcontractors, suppliers, etc+ on oil and gas projects. 1oor and Ogunlana, #) 6+ re-eal that contractor inexperience is among the top 5

ten causes of dela"s in construction projects especiall" with traditional t"pe contracts. #1oor and Ogunlana, ) * citing Odeh and 7attaneih, ) )+. 1his 9+ where the disco-er" aligns with the results from a sur-e" b" #?ong, et al., )

incompetence of contractors ranked the most rampant problem in the industr". 1he more effecti-e the suppl" chain is, the more the project depends on them. 1he risk of poor 2ualit" products being deli-ered and the risk of a break in the supplier;s production are usuall" experienced in oil and gas projects in /igeria due to incessant power failures and una-ailabilit" of genuine construction materials and e2uipments. 9. 'ompetence risks< 1hese are risks due to poor management and emplo"ee competenc" on projects. 3nefficient communication can lead to misunderstandings and errors while poor leadership leads to production losses and reduces staff confidence. 3n /igeria, contracts are won b" indigenous unskilled companies either because the compan" owners ha-e #ethnic, famil", religion, group, etc+ ties with the person awarding the contract e.g. minister, because @due process; #Okpala, 1991+ is neglected. to the detriment of competent multi&national companies with high technical skill and financial patronage. 1hese results to poor 2ualit" jobs being done on projects, time and budget o-erruns. 5. 'omplexit" risks< 1hese are risks that arise due to the complex nature of projects. 5astrous, et al., #1991+ re-eals that increases in complexit" of e2uipments, s"stems, processes and procedures used in carr"ing out projects, will probabl" lead to risks of technological failure which could lead to accidents. 5e-elopment of complex designs for engineering projects can make buildabilit" -er" difficult because useful time is usuall" wasted in tr"ing to understand the design concept. that is wh" in /igeria, most offshore platform designs are made as simple as possible. ?ouca and Mohammed 0li, #) *+ acknowledges that, due to the hostile en-ironment which offshore installations are operated on, designs should be kept -er" simple and at the same time the safet" and protection of assets and personnel must be considered.

6. 3nformation technolog" #31+ and technolog" risk< $hittaker, #1991+ re-eals that one third of most software related projects were terminated before their nominal completion time. #$hittaker, 1991 cited in %afra&'abe(a, et al., ) *+ 1hese are risks that arise due to the internal risks that new technologies and information technolog" #31+ pose on most modern projects. 3n /igeria, oil and gas engineering design projects rel" so much on 31 and the projects cannot run effecti-el" without it. 1herefore, failure of the s"stem or need for changes can reall" dela" a projects functionalit". 1he common reasons for s"stems failure in /igeria are power failure, #/:,0+ defecti-e hardware, infection b" -iruses, defecti-e software, etc. 1his causes losses of s"stem records, disruption in operational capabilit", time losses and can at times increase cost as well reduce the 2ualit" of deli-erables because of the rush to meet up with deadlines to co-er up for lost time. 0lso, hackers and sabotage is another risk which projects dependenc" on 31 is exposed to.0lso, not using modern practices and processes is an attribute of poor management. e.g. /:1'O H new designs and softwares. D. ,eople risks< 1hese are risks that arise when important indi-iduals pla"ing major roles on a project lea-es and takes with them specialist operational or management knowledge or contacts #e.g. suppliers contacts+ which adds -alue to the project. 1here is alwa"s a possibilit" that there expertise ser-ice will be used against there former compan" as a ri-al competitor in the new compan". Aood @Buccession ,lanning; b" constant training should be encouraged b" project managers because it is common that project personnel lea-e before the end date of projects. #=oberts, et al, ) >+ 3n /igerian offshore engineering operations, the wrong selection of project management team is usuall" a source of people risk because the 31 personnel usuall" used on projects are "oung and ha-e little or no petroleum engineering experience. On the other hand, the "oung petroleum engineers with extensi-e engineering field experience usuall" ha-e little or no 31 experience. #7harucha and Iolland, ) . 2.7.7 Speculative and static risks: Bpeculati-e risks are those risks that cause projects to. experience potential losses or gains, or adds negati-e or positi-e -alues to a project. 1his can be due to -ariations and changes in D *+

the general market conditions with a potential for making a compan" lose or gain in the compan";s business objecti-es. #=oberts, et al, #) research and de-elopment. On the other hand, static risks are those risks that consider potential losses which projects are exposed to. and tr" to find a-enues to protect and safeguard the project so as to minimi(e the losses. 0 t"pical example is insurance co-er which can change o-er time and the degree of protection of the countermeasures can also differ. :.g. are personnel insurance, fire insurance, public liabilit" #conse2uential loss+ and third part" insurance, tortuous liabilit" #professional indemnit"+ insurance, etc. Mergers and ac2uisitions help spread static risks and increases a project;s resilient to risks like go-ernment fiscal polic" changes or sudden statute changes. 2.7.8 Risk interdependency: >+ :.g. share fluctuations, in-estment in

3t is important to note that these risk t"pes are interrelated and o-erlap each other on oil and gas projects because strategic risks which can affect project implementation are identified when de-eloping a project;s strategic project plan. and there are so man" change risks which can generate operational risks that can originate from internal and external changes during the implementation of a the project strateg". 0lso, an external risk can generate risks that can affect a project at all risk le-els. 1hese unforeseeable risks can occur because of the particular risk;s 4interdependenc"6 with other risks. 0 clear understanding and knowledge of how risks are interconnected and their interdependenc" is important, but this will not ha-e practical -alue unless it is used for effecti-e risk management which is a -ital tool for efficient management of projects. 1he wa" good project managers think about risk management is b" focusing on how to mitigate risks so as to achie-e their project;s objecti-es. 1he next section will briefl" consider the concept risk management and how it is practiced in oil and gas projects. #=oberts, et al, ) 2.8 >+ Risk Management and Pr !ects:

:normous literature ha-e been written about project risk management and most of them seem to come to an agreement that risk management is about finding the sources of risks on projects and determining methods b" which these risks can be mitigated on projects. *

%afra&'abe(a, et al, #)

*+ and ,M3, #)

+ defines risk management as practiced in a

project en-ironment. as a s"stematic process for identif"ing, anal"(ing and responding to uncertainties which are project&related conditions or e-ents that ha-e the capabilit" to impact undesirable conse2uences on a project;s aims and objecti-es. #%afra&'abe(a, et al, ) *. ,M3, ) + 0nother -iew b" the 0ustralian =isk Management Btandard #=isk Management Btandard 0BC/%B 9>6 +, #1999+ proposes that, risk management process is about unco-ering the weaknesses used in product de-elopment methods -ia a structured wa" in order to initiate timel" mitigation actions so as to a-oid, transfer, reduce the likelihood and reduce the impact of risks. 'er-one, ) 6, #Giel, et al, 199* cited in 'er-one, ) 6+ concurs, that all risks can be

effecti-el" mitigated or addressed b" using one of following wa"s< 3. =educing or eliminating the risks b" including the remedies to project issues or problems in the project plan 33. 1ransferring the risk to other acti-ities or to other responsible parties. 333. 0bsorbing or pooling the risk b" planning for them 3J. 0-oiding the risks b" ensuring that 2ualit" control procedures and practices are put in place on the project 5ue to time constraints which are a characteristic feature of oil and gas projects. 'oncurrent :ngineering #':+ philosoph" is usuall" used to for o-erlapping design and construction stages. ': is the de-elopment of processes and products b" carr"ing out project tasks or functions concurrentl" or simultaneousl" with the aim of reducing time, cost and achie-ing high 2ualit" products. #'aillaud, et al., 1999+ 0ustralian =isk Management Btandard #=isk Management Btandard 0BC/%B 9>6 +, #1999+ proposes a risk management process which is ideal for most ': projects, which is a major characteristic of oil and gas projects. it could be argued that it also applies to most oil and gas projects. 1his is illustrated in Eigure )&) as follows<

"igure # $ Representati n % risk management pr cess. S urce &'S()*S +,6-: #.../

'ommunicate and consult

11

Monitor and =e-iew

'ommunicate and consult

:stablish the context

3dentif" risks

0nal"(e risks

:-aluate risks 1)

0ccess risks

Monitor and =e-iew

1reat risks

1he risk management process comprise of se-en #D+ iterati-e sub&processes which are as follows< establishing risk context. identif"ing risk. anal"(ing risk. e-aluating risk. consultation and communication amongst stakeholders. controlling and monitoring risk related e-ents. 1he risk management process aligns with 'oncurrent :ngineering #':+ projects de-elopment and design because cost is reduced when changes are made during the design stage of oil and gas projects than when changes are made during implementation or construction stages of the projects. #0hmed, et al., ) 2.. Risk Management 0ec1ni2ues: D+

1he -arious risk management techni2ues that are used on most projects will be outlined while describing the stages of the risk management process. 2...# Esta3lis1ing Pr !ect 4 ntext: >a, b+ describes the establishing of context on projects as the stage in

0hmed, et al., #)

risk management process where the project units #process, functional, data, etc+ and the relationships between them are represented. 1his is a -er" essential stage in oil and gas projects because the project risks are accessed from a strategic perspecti-e. 1he project status is represented in numerous forms like. how bid preparations will be carried out. how resources will be used. the project;s budget. the stakeholders in-ol-ed. e2uipments re2uired for the project. contractual deli-erables. the project;s strategic aims and objecti-es. the project;s time schedule and the purpose of the project with respect to aspects which the project team deems important for the successful deli-er" of the project objecti-es. 1he risk management techni2ues used in for establishing context on projects which are also used as project modeling techni2ues and tools are stated as follows #0hmed, et al., ) 1. ,roject network diagrams ). ,recedence diagram method #,5M+ >. Aenerali(ed acti-it" networks 9. 5esign structure matrix #5BM+ 5. 35:E functional modelling 6. 35:E> process modelling 1> D+<

2...2

Risk Identi%icati n:

=isk identification is usuall" the first stage of risk management on most projects and the same also applies to oil and gas projects. 0ll project situations are studied alwa"s so as to determine what could go wrong with regards to the project de-elopment and design. 3t la"s the foundation for the following stages which are. risk anal"sis and risk control. 0ll the possible sources of risks #losses or gains+ and their indi-idual impacts or conse2uences to a project are identified during this stage. #1chanko-a, ) )+ defines sources of risks, as the elements of a project;s en-ironment

which can either bring negati-e or positi-e outcomes to the project aims and objecti-es. #:lms, 199*+ proposes, that the sources of risks on projects are classified into external and internal risks. but #$illiams et al., 199* cited in 1chanko-a, ) )+ argues, b" classif"ing sources of risks in a more detailed wa" with respect to the en-ironment in which the risks arise as follows< social en-ironment. ph"sical en-ironment. operational en-ironment. political en-ironment. legal en-ironment. cogniti-e en-ironment and economic en-ironment. 1he common risk identification techni2ues which are used on most projects are stated below as follows #0hmed, et al., ) 1. 7rainstormingC'hecklists ). 3nfluence diagrams >. Eault 1rees 9. 'ause&and&effect diagrams 5. Eailure mode and effect anal"sis #EM:0+ 6. Ia(ard and operabilit" stud" #I0%O,+ D. :-ent tree 2..., Risk 'nalysis: D+<

3n oil and gas projects, after the identification of risk e-ents, an assessment of the risk characteristics should be carried out so as to determine whether the risk e-ents re2uire further anal"ses. 3mmediatel" a decision is made in this light. further anal"sis is re2uired to 19

be carried out on a risk e-ent. the next stage is to determine whether this will be carried out b" 2ualitati-e or 2uantitati-e means. #0mornsawadwatana, ) )+

3n most projects, the 2ualitati-e approach of determining risk parameters are often more appropriate and is usuall" used for carr"ing out risk anal"sis because subjecti-e assessment techni2ues which range from the relati-e measures of human opinions, feelings and judgments are used for anal"(ing risks as compared to ideal situations. :-en though 2ualitati-e approach ma" be influenced b" personal preferences, biases and expertise. it still pro-ides the foundation for risk assessment b" highlighting possible risk e-ents. On the contrar", the 2uantitati-e approach is carried out b" statistical anal"sis of historical data for exact prediction of risk e-ents. and determination of risk parameters. . #0hmed, ) D+

Measurement metrics are usuall" established and used for anal"(ing risks so as to determine the magnitude of the risks in order to aid the de-elopment of effecti-e mitigation strategies and plans. ,atterson and /eaile" #) )+ re-eal that the two parameters for measuring risk are. risk impact, se-erit" or conse2uence and risk likelihood or probabilit". 1he likelihood or probabilit" of risk shows the possibilit" that a risk e-ent will occur. while risk impact, se-erit" or conse2uence, is the representation of an outcome that spawned from a risk e-ent. 5e" and Ogunlana #) should also be taken into account. 1herefore, the basic functions which constitute the methodolog" of risk anal"sis or assessment as used on most oil and gas projects are. to determine and measure the magnitude, conse2uence and probabilit" of a risk e-ent. where the product of the risk conse2uence and probabilit" totals up to gi-e the risk magnitude. Mills #) below< RI 5 6 x 4 77777777777777 equation 2.1 $here. RI K =isk impact. 15 1+ shows the relationship between these three functions b" using the e2uation 9+ concurs b" affirming that it will be incomplete to access risks based on the criteria of onl" its expected -alue. the risk se-erit" and likelihood

6 K ?ikelihood of risk. and 4 K 'onse2uence of risk. Bhen, #) 1+ and =after", #1999+ concurs that risks ha-e two attributes and used a model to

2uantif" risk as a product of the fre2uenc" of occurrence and the degree of impact. 1he" proposed the e2uation below< R 5 "r x Im 7777777777777 equation 2.2 $here. R K =isk "r K Ere2uenc" of occurrence of risk. and Im K 5egree of impact of risk. 'agno, et al. #) D+ proposes that for the de-elopment of an effecti-e anal"sis of risks on

projects, the following should be considered< 1. 1he basic elements of the major impending risks should be identified. 1hese comprise of sources of uncertainties, the affected acti-ities, the stakeholders that represent the owners of the risks, and afterwards, the corresponding share of the total project risk should be assigned to each element of risk. ). 0 methodolog" should be de-eloped which will integrate the two main characteristics of risk anal"sis i.e. the anal"sis of the main risks and anal"(ing the usual -ariabilit" with respect to project parameters #e.g. the -ar"ing durations in project acti-ities+, which are the uncertainties that do not threaten the outcome of the project if considered alone. #$ard, 1999+ >. 1he total life&c"cle of the project s"stem which represents the project outcome should be taken into account. 1he maintenance and operational phases of the project should be included in designing the s"stem 9. 0 distinction between the risk anal"sis to be carried out during the project;s conceptual stage should be made #0l2uier, et al.1999+, also bearing in mind all the 16

stakeholders #contractors, subcontractors, suppliers, end users, etc.+ that will be in-ol-ed in the project, and the execution stage, where the contractual content of the project has reached a stationar" point. Bince the main aim in risk anal"sis in a project s"stem is the determination of risk effects project acti-ities. numerous techni2ues in the risk management literature are being applied in modern da" projects. 1he common risk anal"sis techni2ues which are used in most projects are stated below as follows #0hmed, et al., ) 1. ,robabilit" and impact grids ). :stimation of s"stem reliabilit" >. Eault tree anal"sis 9. :-ent tree anal"sis 5. Bensiti-it" anal"sis and simulation 2...+ Risk Evaluati n: D+<

3n projects, after the anal"sis of risk e-ents, an e-aluation of the anal"(ed risks are carried out b" prioriti(ing the risks either b" using lessons learnt on pre-ious projects. organi(ational or compan" knowledge. best practices. industr" benchmarks. past project experiences. and standard practices. #0mornsawadwatana, ) >a+ 0ll these are done so that effecti-e mitigation strategies and plans will be determined and de-eloped for the project concerned. More so, different aspects of a project ranging from project strateg", project schedule, project budget, etc. are in-estigated on this stage with regards to a risk e-ent occurring so that mitigation options for risks are determined and the most suitable option#s+ chosen and incorporated to produce a project mitigation plan. 1he common risk e-aluation techni2ues which are used in most projects are stated below as follows #0hmed, et al., ) D+<

1. 5ecision tree anal"sis ). >. ,ortfolio management< Multiple criteria decision&making method

1D

2...8

Risk Mitigati n(Resp nse:

1he pre-ious sections ha-e gi-en an o-er-iew of risks and risk management processes which are being used toda" in most projects. Oil and gas construction projects are not left out. 3n line with the objecti-e of the stud", this section will discuss the final stage in the risk management c"cle. risk mitigation or response because if effecti-e mitigation plans are not de-eloped on oil and gas projects, it leads to unsuccessful experiences on projects. :-en though, the scope of the research is to determine risk response strategies to effecti-el" mitigate the major risks in oil and gas construction projects. the pre-ious sections were highlighted because risk response strategies cannot be achie-ed or de-eloped without passing through the pre-ious risk management stages. ,M3 #) 9+ defines risk response as the procedure of considering the possible choices

a-ailable on a project and actions de-eloped so as to reduce threats as well as taking ad-antage of the a-ailable opportunities. 3n oil and gas projects, some risks like a broken petroleum or crude oil pipeline are -er" sensiti-e that the" need immediate response while some are small that the" can be neglected e.g. a water reser-oir with little water leakages. 0fter the e-aluation of risk e-ents, risk mitigation or response actions are produced which can be said to be contingenc" plans which are initiated after risk e-ents e-entuate. 1his can be termed a feed back or a reacti-e approach to risk mitigation. #0hmed, et al., ) D+ On the contrar", the feed forward or the pro&acti-e approach is the approach whereb". risk mitigation actions are initiated based on the probabilit" or chance that a risk e-ent will occur. #Gartam and Gartam, ) 1+ 0 t"pical example is. when oil and gas companies get insurance co-er with regards to fire outbreak or other construction risks like death of staff #life insurance+ on their projects. 0 combination of the reacti-e and the pro&acti-e approach is applied to the risk management practices carried out in most contemporar" oil and gas projects for a-oiding risks, retaining risks, reducing the probabilit" of risks, reducing the impacts of risks, and transferring risks. #=isk Management Btandard, 0BC/%B 9>6 , 1999+ 1hese following risk mitigating or response techni2ues will be discussed below as follows< 2...8.# Risk av idance:

3n this techni2ue, instead of confronting the risks, the" are usuall" eliminated or a-oided b" organi(ations. 0 t"pical example of risk a-oidance usuall" used b" oil companies is b" not 1*

tendering for construction projects which the" en-isage ma" not turn out to be fa-orable for their compan". especiall" when multinational companies want to in-est in new projects that are outside their home countr". 0nother example is the /igerian federal or state go-ernment, not releasing funds for a project the" en-isage will be unsuccessful. 1his is because if careful feasibilit" studies are not done, the compan" and the go-ernment bod" handling the project ma" be faced with political risks of expropriation and nationali(ation. #7erlin, et al., ) 2...8.2 >+ and en-ironmental risks.

Risk retenti n:

3n this techni2ue, risks are usuall" monitored b" organi(ations b" ensuring that ade2uate back up strategies or plans are pro-ided in case the exposure to the risk changes. 1he compan" fulfilling the contract terms is usuall" retain risks on oil and gas projects. and most times companies tend to retain risks that are fre2uent in occurrence and ha-e small losses. 1here are two t"pes of risk retention< the acti-e and passi-e retention. 1he acti-e retention also known as @self&insurance; is the t"pe whereb" companies deliberatel" manage risks after cautious e-aluation of potential costs and losses from different wa"s of handling risks. while passi-e retention also known as @non&insurance; arise because of neglect, absence of decision and ignorance. #7aker, et al., 1999+ 2...8., Risk reducti n:

3n this techni2ue, oil and gas companies de-elop or take pre-enti-e actions so as to decrease the possibilit" of risks occurring on projects. 0nother method is b" de-eloping correcti-e actions incase a risk or risks arise on the project. 1he former focuses on the actual causes of the risks for determining the risk likelihood while the latter focuses on the conse2uences for determining the risk impacts. 7aker, et al., #1999+ argues that, risk reduction is a form of risk retention because risks are retained first before actions are de-eloped and pursued for reducing the effects. 3n /igeria, oil and gas companies usuall" carr" out risk reduction practices on projects b". staff training to educate them about potential risks; de-eloping effecti-e project s"stem to ensure consistenc"; ph"sical protection for health and safet" risks; etc. 2...8.+ Risk trans%er:

19

3n this techni2ue, oil and gas companies transfer risks to the best parties that can handle the risks. 1he acti-it" or the propert" which is responsible for the risk ma" be transferred to a sub&contactor to handle the ha(ardous process. :.g. most oil producer sub&contract their drilling acti-ities which is -er" speciali(ed and sensiti-e to oil ser-icing companies like Bchlumberger because of their expertise in the crude oil drilling acti-ities. 0nother techni2ue being used is b" oil and gas companies are. to retain the acti-it" or propert" responsible for the risk and transferring the financial risk to an insurance compan". 0 t"pical example is the risk of a fire outbreak on an offshore platform is transferred to insurance companies and premiums are paid b" the oil compan". 3t is also known as risk sharing which are of four t"pes namel"< re&insurance. co&insurance. excess or deductible. and first loss co-er. #7aker, et al., 1999+ 0hmed, et al., #) D+ put forward a risk management framework with respect to the risk

management process which is ideal for most projects as shown in Eigure )&> as follows<

"ig 2$,: "rame9 rk % r risk management t

ls. S urce &'1med: et al.: 2--7/

)1

3nteracti-e H 'ollaborati-e 3nterface

'ontext :stablishment

=isk Model H Luer" Mechanism

=isk 3dentification

,rior =isk Gnowledge #=epositor"+

=isk 0nal"sis

Lualitati-e H Luantitati-e Measures

=isk :-aluation ))

5ecision Bupport B"stems

=isk Eocused ,roject 1eam

1reat =isks

Mitigation ,lanning

2.#-

Summary:

1he chapter clearl" ga-e a background insight into the nature of oil and gas projects, the features and the characteristics of the /igerian oil and gas projects. 1he literature re-iew shows that the /igerian oil and gas industr" comprises of the upstream and downstream sector which are filled with a handful of in-estment opportunities which lead to new projects being carried out on a fre2uent basis. 1he findings from the chapter satisfies the aim and objecti-es of the dissertation in -arious wa"s discussed as follows 3t was disco-ered that oil and gas projects in /igeria are -er" sensiti-e because of the -olatile nature of the products and the en-ironment where the operation and processes are carried out. 0ll these acti-ities expose oil and gas projects to different risk factors. 1he different sources of risks in oil and gas projects in /igeria oil and gas industr" can be classified b" the nature of the en-ironment where the" originate as follows< social en-ironment. ph"sical en-ironment. cogniti-e en-ironment. operational en-ironment. political en-ironment. legal en-ironment. and economic en-ironment. =isks in oil and gas projects in /igeria oil and gas industr" can also be classified b" the risk le-el within a project and b" the exact nature, characteristics or dependenc" of the risks to other risks. 1he" are< strategic, change, operational and unforeseeable risks #risk le-el+. Gnowledge and financial. external and internal. speculati-e and static were classified with respect to their characteristics and nature. 0lso, there is interdependenc" between the -arious t"pes of risks as the" take their forms in /igerian oil and gas projects. 1he literature re-iew re-ealed that the concept of risk management -er" essential and needs to be routine so that oil and gas companies can meet with their objecti-es of cost, time and 2ualit". with respect to the ha(ardous nature of oil and gas projects. =isk management as

)>

practiced in oil and gas projects was found to be di-ided into fi-e stages< establishing the project concept, risk identification, risk anal"sis, risk e-aluation and risk mitigation. 3n /igeria, at the strategic stage of oil and gas projects, the context of the project is established with respect to setting project units, working relation ships, etc. 1he risk identification stage is the stage where all the possible sources of risks and their indi-idual impacts or conse2uences are identified. 1he risk anal"sis stage follows b" a complete assessment of the characteristics of the identified risks #risk probabilit" and conse2uence+ either 2ualitati-el" or 2uantitati-el" so as to determine the magnitude of the risks. 1he risk e-aluation stage is where the anal"(ed risks are prioriti(ed so that effecti-e risk mitigation plans or strategies can be de-eloped on the project. 1he risk mitigation stage is the last and -ital stage of the whole risk management c"cle where all the possible choices a-ailable so as to reduce the project threats are carried out, and strategies are de-eloped to counter these and also explore a-ailable opportunities on the project. 3t was found that risks could be a-oided, retained, reduced and transferred. Buitable techni2ues used in carr"ing out risk management practices at the -arious stages were highlighted. Einall", project risk management in-estigates in details. the structure of a project, the project en-ironment #external and internal+, processes, products and procedures used in carr"ing out project acti-ities. 3t can also be said to be supplementing for project management practices. 1he chapter has shown that in line with the objecti-es of the dissertation research that it is imperati-e that the different t"pes, forms, and the major sources of risks that emanate in oil and gas projects in /igeria are clearl" understood so that effecti-e mitigation plans or strategies can be de-eloped b" project management teams while carr"ing out risk management practices for the successful deli-er" of oil and gas construction projects in /igeria.

)9

41apter ,: Researc1 met1 d l gy

2.# Intr ducti n:

1he purpose of the chapter is to describe the s"stematic processes b" which all the necessar" data re2uired for the actuali(ation of the research dissertation objecti-es #to determine the major risks affecting oil and gas construction projects in /igeria so that appropriate mitigation strategies can be proposed to effecti-el" respond to these risks+ as mentioned earlier was collected. 0fter an extensi-e re-iew of the current literature on the nature of risks and risk management in /igerian oil and gas construction projects was carried out. the next stage was to gather data through extensi-e inter-iews and 2uestionnaire sur-e" with prominent personnel in the /igerian oil and gas industr" ranging from emplo"ees of pri-ate multinational oil companies, go-ernment agencies #public sector+ to pri-ate indigenous oil and gas construction companies both in the downstream and upstream sector. 1his aspect was done in an objecti-e wa", not b" just collating the necessar" information a-ailable, but also to present a balanced -iew. 2.2 Researc1: 5+ defines research as the s"stematic process whereb" information

?eed" and Ormrod, #)

data is collected, anal"(ed and interpreted so as to increase the researchers understanding of the phenomenon about their interests or concerns. 1he research dissertation aims at identif"ing the risk factors that affect oil and gas construction projects in /igerian and deri-e suitable risk responses for them. 1herefore, to effecti-el" reali(e this stud", the research dissertation will accomplish the three characteristics of research which are stated below as follows #$alliman, ) 5+<

1. 1he research will be performed in a controlled and s"stematic wa" )5

). 3t will be empirical and the results confirmed using the real world situation >. 3t will in-ol-e rigorous data testing sourced from current literature

,.,

Met1 d l gy: *+ put forward

3n order to achie-e the purpose of this research dissertation, ke" decisions which are the choices of a methodolog" or appropriate methods were made. $isker, #) that decisions are usuall" dictated with respect to the manner b" which the world is interpreted b" the author, the t"pe of information the author wishes to disco-er and the research;s final outcome. $isker, #) *+ further states that the difference between methodolog" and research methods is that. the former is the philosophical assumptions and rationale which underlies a particular stud" while the latter are the medium, -ehicles, procedures, s"stems and processes that are used to gather data. 1herefore, research methods which are adopted for a research are go-erned b" the research;s methodolog". $ith respect to the aim of this research, the descripti-e and explanator" approaches to research will be adopted. 1hese will be used for anal"(ing the identified risk sources that are present in /igerian oil and gas projects. 1he stud" also focuses on testing concepts into which major risks are present on most oil and gas construction projects. ,.+ Researc1 met1 ds:

3n practice there are two t"pes of research methods adopted for carr"ing out research and the" are. the 2ualitati-e and 2uantitati-e methods of research. 1he research dissertation will be adopting the mixed methodolog" whereb" elements of both the 2ualitati-e and the 2uantitati-e t"pes of research methods will be used. /aoum, #) D+ describes 2ualitati-e research as being subjecti-e and focuses on the descriptions, experiences and attitudes of indi-iduals in a particular field. Lualitati-e research is mainl" used for testing for the existence of -ariables instead of testing for their fre2uenc" or number. /aoum, #) D+ further breaks down 2ualitati-e research into two t"pes. :xplorator" research is the first t"pe which is used if a researcher;s knowledge of the subject is limited. 0 t"pical techni2ue used here are inter-iews. which are usuall" used for data collection and entails the collection of raw data from the exact things the inter-iewee sa"s to the )6

inter-iewer. 0ttitudinal research is the second t"pe which is used when people;s -iews, opinions and perceptions are e-aluated subjecti-el". 1hus, 2ualitati-e research method is impressionistic because it entails that the research results should be repeated b" others for -alidation or confirmation since it cannot be -erified using tests. and the researcher should also ha-e an open mind. 1his approach will suit the research dissertation with respect to the research aim of proposing strategies for mitigating the major risks that affect oil and gas construction projects in /igeria. On the contrar", 2uantitati-e approach, which is objecti-e in nature, originates from a positi-ist methodolog" which utili(es a deducti-e, interpretation for phenomenon and explaining e-ents, and 2uantitati-e data collection. #$isker, ) *+ 1he 2uantitati-e data is hard, reliable, and not abstract with countable and tangible measures because statistical anal"sis of the collected data are tested for -alidit" and this can be repeated for similar results to be experienced. #/aoum, ) D+ Bocial sur-e"s are used during this t"pe of research and because of the gap between the researcher and the stud" sample and the rigorous testing of concepts. it will be suitable for this research. 1his will be e-ident in the research objecti-e of determining the major sources of risks that affect oil and gas construction projects in /igeria. Fust like the 2ualitati-e research, the 2uantitati-e approach has its limitations. 3f re2uired information cannot be 2uantified, there is difficult" in using this method. 1herefore, 2uantitati-e methods can be argued to possibl" be subjected to bias because of the data context, design of the research and the population sample. ,.8 ;ata c llecti n: 5+ are the pieces of information recei-ed b"

5ata as described b" ?eed" and Ormrod, #)

an obser-er of a particular situation. 1he research dissertation will use the two t"pes of data which are. the primar" and the secondar" data. 1he primar" data used for the research were gathered b" the use of 2uestionnaires and extensi-e phone inter-iews designed in line with the research objecti-es. 1he target population for the data collection. were the people that are in-ol-ed in oil and gas construction projects acti-ities, both in the upstream and downstream sector of /igeria oil and gas industr". 1he respondents were managers, risk experts, project managers, project team members and other significant personnel in go-ernment agencies, pri-ate multinational and pri-ate indigenous oil and gas companies. 1he secondar" data was collected -ia an in&depth re-iew of current literature into the t"pes )D

of risks, sources of risks and risk management as practiced in /igerian oil and gas projects. 1he information was sourced from electronic and hard sources. 1he hard sources were journals, books, academic publications and proceedings from conferences while the electronic sources for the data mining process of the of the research was collected from the internet so as to throw more light into the nature and opportunities that are open to in-estors in the /igerian oil and gas industr". 1he reasons for the selection of both the 2ualitati-e and 2uantitati-e methods for the research are as follows< 1. 1he oil and gas industr" is ad-ersarial, contractuall". and -er" competiti-e, commerciall". thereb", opinions from experienced personnel are -er" -aluable because of restrictions that are placed on gi-en access to detailed information. ). 'ontractors, clients and the go-ernment agencies in the industr" are lacking cohesion. thereb", creating a deficienc" in accessing comprehensi-e data. 1hus, it is essential to compare the statements from these organi(ations. >. 1here ha-e been confidential and commercial restrictions to data pre-iousl" presented in the oil and gas industr" because of the absence of single data sources. ,.6 Survey researc1:

3n the 2uest to ac2uire information, a sur-e" research was conducted into the major risks that affect oil and gas construction projects in /igeria. 3n this t"pe of research, information is ac2uired with respect to a group of people in line with the research objecti-es i.e. the /igerian oil and gas construction ke" pla"ers; -iews towards the major sources of risks in oil and gas projects. 1hese will entail. their opinions, characteristics and attitudes to the risk t"pes, sources and the risk management practice as a whole. 1he sur-e" method was emplo"ed for this research because of the simple nature of the design. 1hree methods usuall" used for sur-e"s as identified b" ?eed" and Ormrod, #) 1. 1elephone inter-iews ). Eace to face inter-iews >. Luestionnaires 5+ are<

)*

1he use of telephone inter-iews and 2uestionnaires will be adopted for data collection in this research which is in line with the proposition made b" /aoum, #) researches made in the construction industr". ,.6.# 0elep1 ne Intervie9s: D+ that, postal 2uestionnaires and personal inter-iews are the most suitable form of data collection for

3n the 2uest to ac2uire information and for the accommodation of 2ualitati-e research methods. personal in&depth telephone inter-iews were carried out. 1hree top managers< a ,roject manager working with a pri-ate, multi&national oil and gas compan". a ,roject manager working with an indigenous. pri-ate sector oil and gas design and construction compan". and a ,roject manager working with a go-ernment agenc" that inspects all oil and gas acti-ities on projects both in the upstream and downstream sector of the /igerian oil and gas industr". were inter-iewed. 1he sources of the 2uestions that were asked the respondents were drawn from extant literature and were in line with the objecti-es of the research. ,.6.2 <uesti nnaires:

1he use of 2uestionnaires is a common method for data collection. 3nformation is usuall" collected directl" -ia the responses coming from 2uestions that were asked a group of people. 1he respondents to the sent out 2uestionnaires were managers, risk expatriates, project managers, project team members and other significant personnel of go-ernment agencies, pri-ate multinational and pri-ate indigenous oil and gas companies. 1he 2uestionnaires will gather factual information with regards to the /igerian oil and gas industr";s ke" pla"er;s -iews and attitudes to the major risk t"pes and sources that oil and gas construction projects are exposed to, as was disco-ered from existing literature. :-en though, the use of 2uestionnaires is usuall" good for sur-e"s done in large scale, it can also be used for sur-e"s done in small scale pro-ided the researcher;s issues to be in-estigated and information to be gathered are clear and precise. #Munn and 5re-er, 199 + 1he use of 2uestionnaires is appropriate for the research because of the numerous ad-antages stated as follows #$alliman, ) 1. 3t is cost effecti-e ). 3t is eas" to design )9 5. $isker, ) *+<

>. 3t can be sent to a large number of people 9. 3t ensures the respondents anon"mit" 5. 3t reduces misrepresentation and misinterpretation of 2uestions because of the standard nature of the 2uestions. On the other hand, 2uestionnaire are imperfect and ha-e the disad-antage of slow response with regards to the respondents, time spent in its design, time spent in anal"(ing the findings and bias which ma" be influenced b" the background of the respondent. 1he identified disad-antages related to using 2uestionnaires were taken care of b" the wa" the 2uestionnaires were designed and administrated in the research. ,.6.2.# <uesti nnaire ;esign: Luestionnaire design is -ital in sur-e" research gi-en the fact that people are often put off b" 2uestionnaires. #$isker, ) *+ 3t is recommended and essential to thoroughl" pilot the 2uestions that will make up a 2uestionnaire. 3n this stud", in order to be sure that a clear understanding of the 2uestions was achie-ed with respect to the sample group. the 2uestions were refined and piloted carefull" before the final 2uestionnaire was generated. so as to eliminate ambiguit". 3t was achie-ed b" using simple instructions to describe and guide the respondents on how the" should answer the 2uestions. 1he 2uestionnaire la"out was split into two sections, with each of the sections #which were mostl" closed ended 2uestions+ focusing on a -ital area in the stud". 1he two sections of the 2uestionnaire ha-e the following headings< 1. AeneralC'ompan" 3nformation ). =isk Management =ationale 1he adoption of this approach assisted in a-oidance of o-ercrowding and unnecessar" duplication of the research 2uestions. 1his conforms to the proposition b" $isker, #) *+ which states that the use of length" 2uestionnaires usuall" makes the respondents irritated and bored, leading to low rate of response. 1herefore, the 2uestionnaire in this research was designed to comprise short and precise 2uestions at the fore front followed b" a continuum link to further 2uestions in the research. >

3n the 2uest for data collection, some part of the second section of the 2uestionnaire adopted the fi-e&le-el judgment scale #1hu"et, et al., #) D+ which utili(es the use of numerical rating scale arranged in order of how @high;, down to how @low;, a respondent;s -iew is, towards the research 2uestions. 0lso, the forced choice method of the ?ikert scale& t"pe 2uestions was used in determining the fre2uenc" of usage of the different t"pes of risk response techni2ues used in oil and gas organi(ation. 1hese techni2ues were supported b" ?eed" and Ormrod, #) D+ when attitudes, characteristics, beha-iors or other e-ents of *+ concurs interest are to be assessed on a continuum. 3n using this approach, #$isker, ) 1hereb", the respondents are more likel" to be focused on the 2uestionnaire. ,.6.2.2 <uesti nnaire 'dministrati n: 1he introduction of the internet has assisted in resol-ing the problems related to using 2uestionnaires for data collection in research. 1he administration of 2uestionnaires -ia electronic media has helped in resol-ing and eliminating the cost issues linked to postal 2uestionnaires administered to large samples. losses due to mails in transit. the length of time in-ol-ed in postages. and respondents; attitudes towards postal ser-ices. 1hus, the research utili(ed electronic media -ia email for 2uestionnaire administration due to the fore mentioned ad-antages. 3n the 2uest to seek a high response to the 2uestionnaires from the respondents, Microsoft word was the software used in de-eloping the 2uestionnaire because of the software;s popularit" and respondents; knowledge in the business en-ironment. 1he 2uestionnaire was designed with user friendl" Macros #software program statements+ which were written and added to the Microsoft word file to enhance the filling capabilit" of the respondents b" making use of interacti-e check boxes that the respondents completed electronicall", sa-ed and sent back to the author;s email address that was clearl" written in the 2uestionnaire. 7" so doing, the time wasted in the respondents, printing out, filling out, scanning, attaching back to there email addresses before sending back responses was a-oided. 1hus, it eliminated the need for respondents to be proficient in computer usage. ,.7 Sample Selecti n: >1

that 2uestions are easier to cipher b" respondents as compared to the open ended 2uestions.

Bampling is -er" -ital in research due to the fact that an entire population is almost impossible to examine. #Eellows and ?iu, ) >+ 1he unit for sampling in the research were managers, risk experts, project managers, project team members and other significant personnel in go-ernment agencies, pri-ate multinational and pri-ate indigenous oil and gas companies both in the upstream and downstream sector of /igeria oil and gas industr". Luestionnaires totaling up to 9 in number were sent out amongst the entire target sample. 1he distribution and the response order will be represented in the subse2uent chapter. 8sing this method for the research was chosen because it offers a good representation of the people in-ol-ed acti-el", in procuring oil and gas construction projects in /igerian oil and gas industr". ,.8 Researc1 ;elimitati ns:

1he risk management process as practiced in /igerian oil and gas construction projects in-ol-es people in the downstream and upstream project groups of public sector go-ernment agencies, pri-ate multinational companies and pri-ate indigenous companies. 1hese different groups with their different characteristics ha-e their indi-idual opinion and -iews about the major risks t"pes and sources in oil and gas projects and the mitigation strategies for these risks. 1herefore, for the purpose of the stud", onl" the perspecti-es of the target population on major risk sources will be sought. $ith respect to the gap in distance between the author and the target population. and the time frame which is needed for completing the research, the choice of telephone inter-iews and the use of an electronic 2uestionnaire was the most suitable media for data collection for the research. /e-ertheless, it was recogni(ed that the representation of the entire target population ma" not be repudiated from the respondents -iews because. not all the operators in the upstream and downstream sector of the /igerian oil and gas industr" ma" ha-e access to internet to facilitate the data collection process. /e-ertheless, the sample still continues to be a -alid and dependable information source since most of the corporate, public and pri-ate sector oil and gas organi(ation in /igeria ha-e internet access. ,.. Et1ical Issues: D+<

1he following ethical issues were considered in carr"ing out the research with respect to the principles stated below as follows #1hu"et, et al., ) >)

1. 3nformed consent< 1he respondents which participated in the stud" were notified about the objecti-es of the research and had the choice of not to participate or do participate. 1he respondents were also notified of the choice of being informed about the result of the research findings if the" so wish. ). Ionest"< 1he research was carried out in a manner that is honest. $hile carr"ing out the research, -arious authors and their ideas which were used in the research were referenced and acknowledged. >. ,rotection from harm< 1here was no threat or ps"chological harm to the respondents with regards to the wa" the research 2uestions were designed. 9. 0non"mit"< 1he respondents were gi-en utmost assurance that their responses will remain pri-ate and their comments or identit" not exposed without the written consent of the respondent or noted otherwise.

>>

41apter +: ;ata c llecti n and analysis

,.# =vervie9 % 'ppr ac1es:

1he purpose of this chapter is to anal"(e and discuss the responses and results from the research data that was collected from respondents in /igerian oil and gas construction companies. 0 combination of the 2ualitati-e and 2uantitati-e approaches to data anal"sis will be utili(ed in anal"(ing the collected data that originated from a 2uestionnaire sur-e" and extensi-e phone inter-iews. +.#.# <ualitative 'ppr ac1:

3n&depth telephone inter-iews were carried out with three experienced managers that execute risk management functions as follows< 1. 0 Bafet" Manager #upstream and di-ision+ working with 5epartment of ,etroleum =esources #5,=+. the /igerian go-ernment;s regulator" authorit" and a public sector compan" that inspects oil and gas companies acti-ities. ). 0 ,roject Manager working with an indigenous, pri-ate sector oil and gas design and construction compan" that undertake both upstream and downstream oil and gas projects >. 0 ,roject Manager working with a multinational pri-ate sector, oil and gas exploration, drilling, design and construction compan" that undertake both upstream and downstream oil and gas projects 1he responses to the 2uestions will be anal"(ed so as to gi-e an insight into the wa" oil and gas companies in /igeria respond to the major risks that emanate on oil and gas construction projects. 1heir responses was used to de-elop an extensi-e checklist of risks and sent to other respondents #as 2uestionnaires+ in different oil and gas companies both in >9

the upstream and downstream sectors. 1he 2ualitati-e method will also be used to discuss and for narrating the results from the 2uantitati-e anal"sis.

+.#.2

<uantitative 'ppr ac1:

1he 2uestionnaire sur-e" data from section twel-e #1)+ of the distributed 2uestionnaire will be anal"(ed b" using the =elati-e index #=3+ techni2ue. 1he respondents were asked to judge the attributes of e-er" risk. 1he attributes were two in number and are< the fre2uenc" of occurrence, represented b" @Er;, and the degree of impact, represented b" @3m;. Bhen #) 1+ and =after", #1999+ represent this using the e2uation below< R 5 "r x Im 77777777777777 equation 4.1 $here. R K =isk "r K Ere2uenc" of occurrence of risk. and Im K 5egree of impact of risk. 0ll the attributes abo-e will be measured numericall" and the respondents will make their judgments b" using the fi-e le-el scale of judgment which uses -er" low, low, medium, high and -er" high for representing both the degree of impact and fre2uenc" of occurrence of risks. 1he model is applied b" con-erting the opinion judgment scale into numerical scales. 1his research will appl" -alues as suggested b" ,M7OG #) +, which assigns a -alue of .1 to @-er" low; and -alues of .>, .5, .D and .9 to @low;, @medium;, @high;, and @-er" high; respecti-el". 5ata will be collected and the weightings of all the risks from each respondent;s assessment are called the risk score. and will be calculated using the formula 1hu"et, et al. #) D+<

Rij = Frij x Imij7777777777777 equation 4.2 $here. Rij K =isk Bcore Frij K Ere2uenc" of occurrence for risk i assessed b" respondent j Imij K 5egree of impact for risk i assessed b" respondent j >5

0n a-erage score for each risk is determined b" calculating the a-erage scores from all the respondents. 1his is called the @risk&index score;, which is used for ranking the risks. 1he risk&index score is then calculated with the following formula<

RI =
i

R
j =1

MMMMMMMMMMMMMM equation 4.3

$here.

RI iK =isk&index score for risk i Rij K =isk score assessed b" respondent j for risk i N K /umber of respondents

1he risk ranking will be done b" ordering the risks in increasing numerical order of #1, ), >MM.+, with the major risk ha-ing the -alue of @1;, the second major risk ha-ing the -alue of @); and so on. +.#., >rap1ical Illustrati ns:

,ictorial and graphical presentations will be used as another techni2ue for con-e"ing the results and findings of the research in a non&-erbal manner. Araphs and charts will be used as forms of graphical illustration in the research because of their ad-antage of making research results eas" to interpret. +.2 <uesti nnaire survey resp nse:

0 sum of fort" #9 + 2uestionnaires were sent out to four different t"pes of compan" groups that speciali(es both in upstream and downstream acti-ities in oil and gas projects in /igeria as follows< 1 2uestionnaires to public sector companies, 1 2uestionnaires to pri-ate #multinational+ companies and ) to pri-ate #indigenous+ companies. ) 2uestionnaires were distributed to the pri-ate indigenous companies because there are more companies in this categor" than an" other categor". Out of 9 2uestionnaires that were distributed, > 2uestionnaires were returned. 1able 9&1 shows the details of the distribution and rate of 2uestionnaire responses as presented below<

>6

0a3le +$#: ;istri3uti n % survey resp nses

S/No 1 2 3 Company type Public sector Private( Multinational) Private (Indigenous) Nos of questionnaires Distributed Return 10 10 20 5 7 18 Return rate (%) 50 70 90

Total

40

30

75

1he table abo-e shows that a D5! return rate was recorded in the 2uestionnaire sur-e". 1he rate is high as compared to the lower response of 6 ! #/gu"en, et al., ) D+ as reali(ed in a related stud". 1he table abo-e also shows the percentage distribution of respondents in the sur-e" as follows< ,ublic sector companies 5 !. ,ri-ate #Multinational+ companies D ! and ,ri-ate #indigenous+ companies 9 !. +., Secti n #: >eneral(3ackgr und in% rmati n

3n line with the objecti-es of the research, the first section of the 2uestionnaire will anal"(e the effects of the background and general information of the respondents in the sur-e". 1his establishes a clear insight into the acti-ities of the companies answering the sur-e" 2uestions with respect to their staff experience and number, compan" histor" and their general perception to t"pes of risks and the risk effects on risk management as practiced in oil and gas projects in /igeria. +.,.# Resp ndent?s ! 3 p siti n:

3n distributing the 2uestionnaires, a deliberate effort was made to incorporate more managers in the research due to the fact that managers will ha-e a more comprehensi-e knowledge about risks and risk management practices in numerous aspects of oil and gas projects. Erom the sur-e", it was found that 96.6D! #19+ of the respondents were managers >D

which comprised of operations, project and marketing managers. while 5>.>>! #16+ were emplo"ees which comprised of project, safet" and discipline engineers. 1he figure below shows their distribution< 0a3le +$2: Results % resp ndents? ! 3 p siti n
S/No 1 2 3 4 5 ' Respondents job position Project anagers anagers Frequency 10 1 2 7 2 7 ercenta!e (%) 35 3 7 24 7 24

!"eration #a$et%

anagers

Project &ngineers #a$et% &ngineers (isci"line &ngineers

"igure +$#: ;istri3uti n % resp ndents? ! 3 p siti n

(isci"line &ngineers 24) Project anagers 35)

#a$et% &ngineers 7)

Project &ngineers 24)

!"eration anagers 3) #a$et% anagers 7)

>*

1he abo-e table and chart #1able 9&) and Eigure 9&1+ shows that the percentage distributions of the respondents; job position in the sur-e" are as follows< >5! #1 + are ,roject managers. >! #1+ are Operation managers, D! #)+ are Bafet" managers, )9! #D+ are ,roject engineers, and )9! #D+ are 5iscipline engineers. Erom obtained results, it can be inferred that the respondents to the 2uestionnaire are indi-iduals who make significant contributions to the risk management practices in /igerian oil and gas projects. +.,.2 @ rking experience:

0a3le +$,: Results % resp ndents? years % 9 rking experience

S/No 1 2 3 "ears of #or$in! e%perience 0 to 5 %ears ' to 10 %ears *bove 10 %ears Frequency 4 10 1' ercenta!e (%) 13 33 54

"igure +$2: ;istri3uti n % resp ndents? years % 9 rking experience

0 to 5 %ears 13) *bove 10 %ears 54)

' to 10 %ears 33)

1he abo-e table and chart #1able 9&> and Eigure 9&)+ shows that the percentage distributions of the respondents; "ears of working experience in the sur-e" are as follows< 1>! #9+ ha-e to 5 "ears working experience. >>! #1 + ha-e 6 to 1 "ears working experience. and 59! #16+ ha-e abo-e 1 "ears working experience. Erom the obtained

>9

results, it implies that risk management practices in /igerian oil and gas sector in-ol-es people who ha-e high industr" experience.

+.,.,

Educati nal 2uali%icati n:

1he 2uestionnaire results obtained with respect to educational 2ualification show that each of the respondents possessed at least a form of higher educational 2ualification #M70, Msc, 7sc and 7eng+. 1his implies that the decision makers who are in-ol-ed in carr"ing out risk management practices in /igerian oil and gas projects are educated. +.,.+ Resp ndents age gr up:

0a3le +$+: Results % resp ndents? age gr up

S/No 1 2 3 4 5 ' Respondents a!e !roup 25 to 30 +ears 31 to 35 +ears 3' to 40 +ears 41 to 45 +ears 4' to 50 +ears ,50 +ears Frequency 2 12 3 7 5 1 ercenta!e (%) 7 40 10 23 17 3

"igure +$,: ;istri3uti n % resp ndents? age gr up

,50 +ears 3) 4' to 50 +ears 17)

25 to 30 +ears 7)

31 to 35 +ears 40) 41 to 45 +ears 23)

3' to 40 +ears 10)

1he abo-e table and chart #1able 9&9 and Eigure 9&>+ shows that the percentage distributions of the respondents; age groups in the sur-e" are as follows< D! #)+ are )5 to > "ears. 9 ! #1)+ are >1 to >5 "ears. 1 ! #>+ are >6 to 9 "ears. )>! #D+ are 91 to 95 "ears. 1D! #5+ are 96 to 5 "ears. and >! #1+ are abo-e 5 "ears. Erom the obtained results, it was noticed that the age group with the highest fre2uenc" #modal age group+ were between >1 to >5 "ears of age. 0lso, all the respondents from 91 "ears and abo-e were managers. 3t can be inferred that a considerable number of managers are acti-el" in-ol-ed in risk management practices in /igerian oil and gas industr". +.,.8 0ypes % pr !ects executed 3y resp ndents:

91

1he /igerian oil and gas industr" was identified from extant literature to be di-ided into two sectors and as indicated in the 2uestionnaire. respondents were re2uested to select the sector where the" carr" out their project acti-ities. 1able 9&5 shows the sur-e" results.

0a3le +$8: Results % pr !ect types executed 3y resp ndents

S/No 1 2 3 Type of projects e%ecuted by respondents !nl% u"strea !nl% do-nstrea .ot/ Frequency 0 3 27 ercenta!e (%) 0 10 90

"igure +$+: ;istri3uti n % pr !ect types executed 3y resp ndents

.ot/ 90)

!nl% do- nstrea 10)

!nl% u"strea 0)

1he abo-e table and chart #1able 9&5 and Eigure 9&9+ shows that the percentage distributions of the respondents; with respect to the oil and gas sector. where the" carr" out their projects acti-ities are as follows< >! #1 + carr" out onl" downstream project acti-ities. 9 ! #)D+ carr" out both upstream and downstream project acti-ities. and none of the companies carr" out onl" upstream acti-ities. Erom the obtained results, it was noticed that onl" respondents; working with companies that engage in retail and marketing of petroleum products carr"out onl" downstream project acti-ities while others #designCconstruction, inspection, and drillingCexploration+ companies. carr" out their project acti-ities in both sectors which ma" be offshore or onshore. 3t can be inferred that risk

9)

management practices carried out on most of the projects in both the upstream and downstream sectors of /igerian oil and gas industr". +.,.6 Services rendered 3y rganiAati ns:

3n the 2uestionnaire sur-e". respondents were re2uested to select the t"pe of projects ser-ices that their indi-idual organi(ations where the" carr" out their project acti-ities. render in /igerian oil and gas industr". 1he table below shows the sur-e" results. 0a3le +$6: Results % pr !ect services rendered 3y resp ndents
S/No 1 2 3 4 Type of projects ser&ices rendered by respondents Ins"ection (esign0construction 1etail0 ar2eting (rilling0e3"loration Frequency 4 18 4 4 ercenta!e (%) 13 '1 13 13

"igure +$8: ;istri3uti n % pr !ect services rendered 3y resp ndents

13) 13) 13) Ins"ection (esign0construction 1etail0 ar2eting (rilling0e3"loration '1)

1he abo-e table and chart #1able 9&6 and Eigure 9&5+ shows that the percentage distributions of the respondents; with respect to the ser-ices that their indi-idual organi(ations render in /igerian oil and gas industr" are as follows< 1>! #9+ are in-ol-ed in inspection acti-ities. 61! #1*+ are in-ol-ed in design and construction acti-ities. 1>! #9+ are in-ol-ed in retail and marketing acti-ities. and 1>! #9+ are in-ol-ed in drilling and exploration acti-ities. Erom the obtained results and from in&depth telephone inter-iews, it was gathered that. /igerian go-ernment owned public sector companies like 5,=, were in-ol-ed in inspecting and regulating the wa" the other companies #designCconstruction, 9>

inspection, and drillingCexploration+ carr" out risk management practices in both upstream and downstream oil and gas projects. 1his the" do b" gi-ing them guidelines on the risk assessment methodolog" and when to use them on projects. #5,=, ) 6+ 1he retail and marketing companies were pri-ate indigenous companies that carr" out their project acti-ities onl" in the downstream sector. Most of the drilling and exploration companies were pri-ate multinationals that ha-e joint -entures with //,' #the owner of and /igerian go-ernment representati-e. in all oil and gas projects+. #//,', ) *+ 1his is because of the inabilit" of the pri-ate indigenous companies; lack of finance and expertise to carr" out these high technolog" and huge capital intensi-e projects. 61! distribution was comprised of mostl" the pri-ate indigenous companies that carr" out most design and construction projects which were sublets from the multinational companies. 1his large percentage is because of the new /igerian ?ocal content polic" to carr" out D ! of all design and construction projects in the oil and gas sector b" the "ear ) 1 . #/wachukwu, ) *+ 1his boosted the springing up of new design and construction companies. $ith respect to the objecti-es of the research, it can be inferred that risk management practices carried out b" the -arious companies in /igerian oil and gas projects are regulated and monitored under strict guidelines b" /igerian go-ernment bodies responsible for ensuring that project risks are effecti-el" managed and responded to. at the -arious ke" stages of oil and gas projects. +.,.6 =rganiAati ns years % experience:

0a3le +$7: Results % resp ndents? rganiAati ns years % experience

S/No 1 2 3 3 Respondents or!ani'ations years of e%perience 4ess t/an 5%rs 5 to 10%rs 10 to 20%rs 20%rs and above Frequency 0 2 ' 22 ercenta!e (%) 0 7 20 73

"igure +$6: ;istri3uti n % resp ndents? rganiAati ns years % experience

99

73) 4ess t/an 5%rs 5 to 10%rs 10 to 20%rs 20) 7) 0) 20%rs and above

1he abo-e table and chart #1able 9&D and Eigure 9&6+ shows that the percentage distributions of the respondents; indi-idual organi(ations "ears of experience in /igerian oil and gas industr" are as follows< D! #)+ ha-e 5 to 1 "ears. ) ! #6+ ha-e 1 to ) "ears. and D>! ha-e abo-e ) "ears of experience. 1wo companies in-ol-ed in design and construction were in the 5 to 1 "ears of experience range. 1he rest had abo-e 1 "ears experience in the /igerian oil and gas industr". $ith respect to the organi(ations that participated in the research sur-e", it can be seen that most of the companies ha-e been operating in the oil and gas sector for long. 1hus, it can be inferred that most of the organi(ations that partook in the sur-e" are -er" experienced in oil and gas projects. +.,.7 Empl yee siAe:

0a3le +$8: Results % resp ndents? rganiAati n?s empl yee siAe
S/No 1 2 3 4 5 Respondents or!ani'ation(s employee si'e 1 to 100 100 to 250 250 to 1000 1000 to 5000 *bove 5000 Frequency 0 0 4 18 8 ercenta!e (%) 0 0 13 '0 27

"igure +$7: ;istri3uti n % resp ndents? rganiAati n?s empl yee siAe

95

*bove 5000 27)

250 to 1000 13)

1000 to 5000 '0)

1he abo-e table and chart #1able 9&* and Eigure 9&D+ shows that the percentage distributions of the respondents; indi-idual organi(ations emplo"ee si(e are as follows< 1>! #9+ ha-e )5 to 1 ha-e abo-e 5 emplo"ees. 6 ! #1*+ ha-e 1 to 5 emplo"ees. and )D! emplo"ees. Medium si(ed design and construction companies were the + emplo"ees. while large si(ed indigenous

respondents in the third categor" #)5 to 1 had from 1 to 5

multinationals, public sector go-ernment organi(ations and retail and marketing companies N emplo"ees. 1his is because these large si(ed organi(ations ha-e been in existence for man" "ears and carr" out oil and gas projects in their subsidiaries which are spread around the nation. 1hus, it can be inferred that since the large si(ed organi(ations constitute a total of *D! of the sur-e". the" are more organi(ed and ha-e abundance of emplo"ees who carr" out risk management on their -arious oil and gas projects. +.+ Secti n 2: Risk management rati nale

3n line with the objecti-es of the research, this section of the 2uestionnaire will be used to anal"(e the risk management practices carried out b" the respondents in the sur-e". 1he 2uestions seek to find out how organi(ations identif" the sources of risks. the risk response techni2ues the" use. and an anal"sis of the major risks that emanate in /igerian oil and gas projects will be carried out so as to determine the fi-e major risks that impede the projects. 1his will be further anal"(ed so as to determine suitable response strategies for these risks. +.+.# =rganiAati ns and risk management system:

3n the 2uestionnaire sur-e" results. all the respondents agreed that their indi-idual organi(ations maintained a risk s"stem. 0ll also agreed that the identified risks are stored in a risk management database either b" recording the risks in a risk register, documenting 96

and storing them as hardcop" files. or b" storing them as folders electronicall", inside computer hard discs, flopp" dri-es or compact discs. 1his implies that oil and gas organi(ations pa" significant attention to risk management practices so as to effecti-el" mitigate risks on projects.

+.+.2

Risk ranking % r )igerian il and gas c nstructi n pr !ects:

3n the 2uestionnaire sur-e". the respondents which were thirt" #> + in number. were asked to rate a list of twent" #) + risks which were identified from extensi-e phone inter-iews to be the most common sources of risks that emanate in /igerian oil and gas projects. 1he a-erage risk scores from the > respondents was used to deri-e the risk index score b" putting the numerical -alues as proposed earlier in e2uation 9.>. 1his is represented with the formula below<
30

RI =
i

R
j =1

MMMMMMMMMMMMMM equation 4.4

30

$here.

RI i K =isk&index score for risk i Rij K =isk score assessed b" respondent j for risk i 30 = /umber of respondents

1he ranking of the identified top twent" #) + risks was carried out with respect to the risk index score so as to determine the top fi-e #5+ major risks so as to further anal"(e and de-elop suitable mitigating strategies for these risks in line with the research objecti-es. 1his is similar to a stud" carried out b" 1hu"et et al., #) be shown in table 9&9 as follows< D+. 1he 2uestionnaire results can

9D

0a3le +$.: Risk ranking % r )igerian il and gas c nstructi n pr !ects =ank 1 ) > 9 5 6 D * 9 1 11 1) 1> =isk 'ode =1).15 =1).5 =1).6 =1).D =1).9 =1).19 =1).1 =1).11 =1).1> =1).> =1).1D =1).1* =1).1 =isk factors Becurit" threats from neighboring residents 3ncompetence of project team members ,oor designs ?ate internal appro-als from clients ,oor and inade2uate tendering 3nade2uate project organi(ation structure 'hanges in design 3nade2uate budgeting and poor project planning ,oor project feasibilit" studies 3nefficient and poor performance of constructors =educed 2ualit" in procured materials ,oor coordination amongst sub&contractors and contractors 5amage to work b" third part" 9* =3 .56)1 .>*)> .>D5 .)9D9 .)*11 .)D99 .)95* .)>D* .))D* .)1)5 .) 9* .1965 .1D69

19 15 16 1D 1* 19 )

=1).* =1).1) =1).) =1).9 =1).16 =1).) =1).19

7ureaucratic project and go-ernment appro-al procedures 5ifferences in practices between local and foreign contractors :n-ironmental protection pressure of other groups ,oor relationship with go-ernment bodies ?ate pro-ision or deli-er" of materials $orking conditions deferring from contract specification ?ack of experience in design and construction

.1665 .16>* .159) .195) .195) .111) .1 *6

0 comprehensi-e list of the ranked risks as deduced from a combination of in&depth telephone inter-iews and 2uestionnaire sur-e" is shown in the table abo-e. 1he twent" #) + risks are sorted accordingl", in ascending order of their o-erall impact on oil and gas projects in /igeria. 1he top ten risks will then be anal"(ed further to determine their features, characteristics and causes. so that ade2uate strategies can be proposed to mitigate the risks. +.+., 01e analysis % t1e t p ten risks in )igerian il and gas c nstructi n pr !ects:

3n line with the objecti-es of the stud", the top ten major risks in /igerian oil and gas projects will be anal"(ed thoroughl". 3n order to anal"(e these top ten major risks. the mean of occurrence and the mean of impact degree for each indi-idual risk identified b" the respondents where determined. 1his can be seen as shown in table 9&1 as follows<

99

0a3le +$#-: 0 p ten risks statistics % r )igerian il and gas c nstructi n pr !ects Mean of Mean of Occurrence 3mpact Ere2uenc" 5egree #Er+ #3m+ .D .51>> .99>> .)6 .5>>> .9)6D .966D .56 .9)6D .9) .9)6D .6 6D .D6 .65>> .6* .9*>> .5)6D .59>> .9* .9)6D .9*6D .9D>> .95>> .>)6D =isk 3ndex Bcore #=3+ .56)1 .>*)> .>D5 .)9D9 .)*11 .)D99 .)95* .)>D* .))D* .)1)5 .) 9* .1965

=ank 1 ) > 9 5 6 D * 9 1 11 1)

=isk code =1).15 =1).5 =1).6 =1).D =1).9 =1).19 =1).1

=isk Eactors Becurit" threats from neighboring residents 3ncompetence of project team members ,oor designs ?ate internal appro-als from clients ,oor and inade2uate tendering 3nade2uate project organi(ation structure

'hanges in design 3nade2uate budgeting and poor project =1).11 planning =1).1> =1).> =1).1D =1).1* 3mproper project feasibilit" studies 3nefficient and poor performance of constructors =educed 2ualit" in procured materials ,oor coordination amongst sub& contractors and contractors 5

1> 19 15 16 1D 1* 19 )

=1).1 =1).* =1).1) =1).) =1).9

5amage to work b" third part" 7ureaucratic project and go-ernment appro-al procedures 5ifferences in practices between local and foreign contractors :n-ironmental protection pressure of other groups ,oor relationship with go-ernment bodies

.)D>> .>9 .>* .)5>> .)D>> .>) .)>>> .)5>>

.D .966D .> 6D .56 ..99>> .9 6D .>1>> .)9>>

.1D69 .1665 .16>* .159) .195) .195) .111) .1 *6

=1).16 ?ate pro-ision or deli-er" of materials $orking conditions deferring from =1).) contract specification ?ack of experience in design and =1).19 construction

Erom table 9&1 abo-e, it can be deduced that @securit" threats from neighboring residents; risk take up the first position with a risk&index score # .56)1+, to become the risk with the highest risk score&index. 1his is an external risk and has both the highest mean of impact degree # .D6+ and the highest mean of occurrence fre2uenc" # .D+. 3t implies that oil and projects in /igeria are highl" prone to this major risk. 3t was gathered from the conducted inter-iews that the main causes of this risk were disturbances from the local residents and militants in the /iger 5elta region in the form of assault and kidnapping of oil and gas companies emplo"ees. -andali(ing of oil and gas pipelines. and sabotage #fire and explosion of oil and gas facilities+. 3t was also gathered that due to lack of compensation pa"ment which was supposed to be paid to the poor rural dwellers of these oil rich regions for the compulsor" ac2uisition of their lands for oil and gas exploration. alwa"s generates crisis in the area. #Ogedengbe, ) D+

1he second to the fifth risks are as follows< @3ncompetence of project team members; with a risk&index score # .>*)>+. @poor designs; with a risk&index score # .>D5+. @late internal appro-als from clients; with a risk&index score # .)9D9+. and @poor and inade2uate tendering; with a risk&index score # .)*11+. Erom the second down to the tenth #)nd to 1 th+ ranking risks are all internal risks. $ithin this limits were risks which also occupied high positions in the risk ranking and were associated with the management acti-ities of the client. 1he" are as follows< 51

@3ncompetence of project team members; as the )nd. @late internal appro-als from clients; as the 9th. @inade2uate project organi(ation structure; as the 6th. @inade2uate budgeting and poor project planning; as the *th and @improper project feasibilit" studies; as the 9 th. 1he fact that these management associated risks ha-e high ranking signifies that clients and emplo"ers in /igerian oil and gas construction projects are failing in their duties of directing. moti-ating emplo"ees. organi(ing. controlling. and planning oil and gas projects. Erom the inter-iews conducted, it was re-ealed that the reason for these lapses accrue to lack of a defined s"stem in projects; structure and incompetent workers being used on projects. 1hus, it can be inferred that. in order to manage these risks, there should be a focus on impro-ing clients; management skills, abilities and knowledge as well as emplo"ees capabilities. 3t is worth noting that two risks which had high risk ranking. and found their places as the >rd and Dth in the top ten risk ranking were associated with the designs. 1he" are< @poor designs; with a risk&index score # .>D5+. and @changes in design; with a risk&index score # .)95*+. @,oor designs; risk although occupied the o-erall third position, had the second highest mean of impact degree # .65>>+. 1his is because design works which are done at the earl" stages of oil and gas projects ha-e a -er" huge impact on the total outcome of projects. 0 little flaw in a design can cause enormous changes in the construction phase and in allocating resources. thus, reducing 2ualit" and causing cost and time o-erruns on projects. #1hu"et, et al., ) D+

@'hanges in design; risk is common in oil and gas projects and the earlier it occurs, the lesser it has impact on the total project outcome. 3t usuall" occurs in the construction phase of /igerian oil and gas projects. 1his risk had .9* as the mean of impact degree and this implies that changes in design in /igerian oil and gas projects ha-e a medium effect or impact on the o-erall project outcome. Erom the inter-iews, it was gathered that this risk is usuall" caused b" changes in design specifications, scope changes and poor 2ualit" designs. 1o curb these risks, design standards are put in place to enable regulators, clients and contractors to reach a mutual understanding about the wa" to carr" out designs. #Bnell, ) *+

5)

@,oor and inade2uate tendering; risk had the ranking position as 5th. with a risk&index score # .)*11+, mean of impact degree # .5)6D+ and mean of occurrence fre2uenc" # .5>>>+. 1his means that this risk has a se-ere impact on project outcomes. Erom the inter-iews, it was re-ealed that risks associated with tendering in oil and gas projects in /igeria are attributed to poor contractor selection b" clients. 3ncompetent and unreliable contractors end up winning bids due to inade2uacies in the e-aluation processes and selection criteria which lacked @due processes;. 1hus, contractors are appointed b" public and pri-ate sector clients; not on merit but based on whom the" know. #Ogunsemi and 0je, ) and sensiti-e issue "et to be addressed in /igerian oil and gas projects. 1he 1 th risk @inefficient and poor performance of constructors; with a risk&index score # .)1)5+. mean of impact degree # .9D>>+. and mean of occurrence fre2uenc" # .9)+. 1his risk was identified to be a -er" sensiti-e risk that needs to be addressed in /igerian oil and gas industr". 'lients; projects often end up suffering from o-erruns in cost, dela"s in time, poor 2ualit" ser-ices and decreased producti-it" due to poor performance on the contractor side. 3n&depth inter-iews re-ealed that lack of sufficient e2uipments and technolog". appropriate experience. financial capabilit". trained emplo"ees. a-ailable resources. good 2ualit" construction methods. and efficient management skills. were the causes of contractors poor performance on projects. 7esides, /igeria oil and gas projects which are usuall" large and complex, re2uiring huge capital in-estment, modern technologies and e-er changing up to date construction methods. attracts multinational companies. 'onse2uentl", conflicts that impede project successes are often generated due to the differences in technolog" know how between the emplo"ees of multinational and indigenous companies. +.8 Risk resp nse strategies % r mitigating t1e ma! r risks 6+ 1his makes contactor and client ethics during contractor selection and e-aluation processes a complex

3n the pre-ious section, the top ten major risks in /igerian oil and gas projects were identified with their fre2uenc" of occurrence and degree of impact. 3n line with the objecti-es of the stud" and due to the time constraints and limits of the research. 2ualitati-e method of research was used -ia telephone inter-iews with experienced personnel of the /igerian oil and gas industr". to find out the characteristics and causes as well as to propose efficient strategies to effecti-el" mitigate onl" the fi-e major risks on the risk 5>

ranking de-eloped from the 2uantitati-e anal"sis because of the se-ere impacts the" ha-e on oil and gas projects in /igeria. 1his section will focus on anal"(ing each indi-idual risk thoroughl". +.8.# Security t1reats %r m neig13 ring residents &R#2.#8/

1he risks accruing to securit" threats from neighboring residents on /igerian oil and gas projects are enormous. 1hese are external risks that inhibit the achie-ement of a project;s cost, time and 2ualit" objecti-es. 3t was gathered from the conducted inter-iews that the agitating "ouths and militants acti-ities on oil and gas fields in the form of assault and kidnapping of oil and gas companies emplo"ees #:weje, ) D+. -andali(ing of oil and gas pipelines. and sabotage #fire and explosion of oil and gas facilities+. 3t was also gathered that due to lack of compensation pa"ment which was supposed to be paid to the poor rural dwellers of these oil rich regions for the compulsor" ac2uisition of their lands for oil and gas exploration. alwa"s generates crisis in the area. #Ogedengbe, ) D+

3n this light, the respondents to the inter-iew that were carried out proposed se-eral strategies which include< 1. 1he compulsor" land use act should be amended so that ade2uate compensation fees should be paid to the owners of the ac2uired lands b" oil and gas companies or the federal go-ernment. ). 'orporate social responsibilit" #'B=+ #:-uleocha, ) b" oil and gas companies. >. 1he federal go-ernment of /igeria should seek to enforce stringent laws on waste disposals so as to stop the oil spillages from acti-ities from oil and gas construction acti-ities. #:ssoka, et al., ) 6+ 9. 1he ?/A production should be introduced full" so as stop the flaring of gases which cause harm to human, animals and the entire ecological en-ironment in the /iger 5elta region. #Aalbraith, ) +.8.2 *+ 5+ should be enforced b" the federal go-ernment so as to increase the de-elopment of these oil rich communities

Inc mpetence % pr !ect team mem3ers &R#2.8/

59

Erom the phone inter-iews, it was gathered that the /igerian oil and gas projects lack indi-iduals with skills, knowledge and abilit" to perform their duties efficientl". :-en though most project team members possessed at least one form of higher education degree, there is still that lack of insufficient skills needed to manage oil and gas projects. 3n this -iew, the following strategies were proposed b" the inter-iewees as follows< 1. :ffecti-e teamwork should be enhanced -ia staff training to update them with the new technologies and industr" skills. ). Aood staffing b" effecti-el" matching project team members to the right projects where the" can function efficientl" to achie-e optimum producti-it". +.8., P r designs &#2.6/

1he risks of poor designs b" contractors in /igerian oil and gas projects are enormous, and usuall" cause the non&achie-ement of projects; cost, time and 2ualit" objecti-es. $ho absorbs the extra cost of incomplete or unclear scopes and specifications, ambiguous design and designers; incompetenceO 1his 2uestion usuall" causes a lot of conflict between clients and contractors. 3n /igeria, indigenous companies ha-e little experience in design of oil and gas facilities, thus there exists a dominance of foreign multinational companies that ha-e more experience but still run into design difficulties due to the complex nature of the designs in the industr". 3n this light, the respondents to the inter-iew that were carried out proposed se-eral strategies which include #1hu"et, ) D+<

1. 3ndigenous companies partnering with the multinationals to impro-e cost effecti-eness. efficienc". 2ualit" of products and ser-ices. transparenc" and transfer of technolog", long term commitment and enhanced opportunit" for inno-ation. ). 'ontractor selection to be based on experience and pre-ious performance so that competent and experienced manpower will be carr"ing out design works efficientl". >. 8sing concurrent engineering to impro-e constructabilit" and time sa-ings. 9. 5esign standards put in place to enable regulators, clients and contractors to ha-e a mutual understanding about the wa" to carr" out designs. #Bnell, ) *+

55

+.8.+

6ate internal appr vals %r m clients &#2.7/

1his is an internal project risk that usuall" originates in clients organi(ation. 1he inter-iew respondents re-ealed that this risk emanates on /igerian oil and gas projects due to managers lacking the authorit" to sol-e problems and lack of emplo"ee commitment. ,roject managers are usuall" faced with the problem of slow responses from the top management to pressing project issues e.g. allocating resources. 1his leads to time and at times lead to cost o-erruns on projects. #1hu"et, ) strategies< 1. 8sing 1LM #1otal Lualit" Management+ practices for enhancing the in-ol-ement of all project emplo"ees to share in the project -ision and goals. ). :mpowering project managers with appro-als authorit" so as to make on time and faster decisions which enhances inno-ation and successful deli-er" of projects. *+ 3n this light, the respondents to the inter-iew that were carried out proposed the following

+.8.8

P r and inade2uate tendering &#2../

1he risk accruing to poor and inade2uate tendering usuall", can de-iate a project from meeting up with its objecti-es. Oil and gas projects usuall" adopt one of the following methods. restricted tendering, open tendering, restricted accelerated, competiti-e negotiated, competiti-e negotiated accelerated tendering and dialogues. #,alaneeswaran and kumaraswam", ) 1+ 1he inter-iews re-ealed that lack of @due processes; #unethical attitudes of bidders+ and @inade2uate e-aluation criteria; are the main sources that pose tendering risks in /igerian oil and gas industr". ,ublic sector clients often accept lowest price tender so as to show accountabilit" and in defense for criticisms. #$ong, et al., ) + Moreo-er, these bidders submit low prices to win and after winning, the" negotiate with clients at later stages to mark&up their tender. 0nother identified source is the collusion of bidders like withdrawal, briber", and false inflation of co-ering and tender prices. 3n this light, the respondents to the inter-iew that were carried out proposed the following strategies< 1. 1he techni2ue, M'5M #Multiple criteria decision making+ should be used for e-aluating contractors. 56

). 'lients increasing legal enforcement of collusion b" impro-ing the detection of bidders during pre2ualification and final stages of e-aluation. >. 'lients using selecti-e tendering b" in-iting onl" credible and professional contractors +.6 Summary

1he 2uantitati-e and 2ualitati-e approaches were used to assess the major risks that emanate in /igerian oil and gas construction projects. 1he findings from results from the background information of the 2uestionnaire sur-e" re-eals that risk management practices in /igeria oil and gas industr" in-ol-es people with high industr" experience. educated. and mostl" carr" out projects in both upstream and downstream sector. Most of the organi(ations ha-e experience in oil and gas acti-ities because the" ha-e been in existence long enough in the industr". with ade2uate staff strength. 1he second part the 2uestionnaire re-ealed that all organi(ations in /igerian oil and gas industr" maintain a risk management s"stem as well as store identified risks in a risk management database either as hard copies or electronic copies in computer hard dri-es, compact discs and flopp" dri-es. 1he top ten major risks that emanate on oil and gas construction projects both in the upstream and downstream oil and gas sectors are< 5.) Becurit" threats from neighboring residents 6.) 3ncompetence of project team members D.) ,oor designs *.) ?ate internal appro-als from clients 9.) ,oor and inade2uate tendering 1 .) 3nade2uate project organi(ation structure 11.) 'hanges in design 1).) 3nade2uate budgeting and poor project planning 1>.) 3mproper project feasibilit" studies 19.) 3nefficient and poor performance of constructors

5D

Lualitati-e method was used -ia in&depth telephone inter-iews. to further anal"(e the top fi-e major risks due to their high mean of impact degree and high risk index score thoroughl". 1he causes and characteristics of the top fi-e major risks. as well as mitigating strategies were de-eloped to curb the top fi-e major risks that emanate on /igerian oil and gas projects.

41apter 8: 4 nclusi n and rec mmendati ns

+.# 4 nclusi n:

3n recent times, the concept of risk management is an essential process that cannot be neglected in the management of projects in de-eloped countries. /e-ertheless, the practice is still new during the implementation of projects in de-eloping countries. which includes /igeria. Onl" the /igerian oil and gas sector seems to be the sector amongst others. that is keen on utili(ing risk management practices during the implementation of projects because of the -olatile nature of products and characteristics of the project en-ironment where the operation and processes are carried out, in a constantl" changing d"namic en-ironment which is exposed to enormous risks. 1hus, this research is -er" significant and timel" considering the fact that the oil and gas sector is the most important contributor to the total re-enue of the /igerian econom".

5*

1he research dissertation which aimed at identif"ing the risk factors that affect oil and gas construction projects and to deri-e risk responses for them was accomplished -ia reali(ing the following research objecti-es< 1he different t"pes of risks as well as the different en-ironments where these risks originate in oil and gas projects where identified from an extensi-e literature re-iew. 0 closer assessment -ia a 2uestionnaire sur-e" was s"stematicall" used to determine the fre2uenc" of occurrence and the degree of impact of the major sources of risks that emanate in oil and gas construction projects in /igeria. 1he results of the research -ia the risk scores of the major risks re-ealed that the top ten major risks in oil and gas construction projects in /igeria were< 1. Becurit" threats from neighboring residents ). 3ncompetence of project team members >. ,oor designs 9. ?ate internal appro-als from clients 5. ,oor and inade2uate tendering 6. 3nade2uate project organi(ation structure D. 'hanges in design *. 3nade2uate budgeting and poor project planning 9. 3mproper project feasibilit" studies 1 . 3nefficient and poor performance of constructors

8.2

Rec mmendati ns

Eor the successful deli-er" of projects, it is essential that a thorough examination of the major risks affecting a project is examined. 3n the 2uest to de-elop strategies to effecti-el" mitigate the identified major risks. literature and in&depth inter-iews were carried out in the research and were used to proffer appropriate practical strategies which where proposed for the top fi-e most ranked, major risks in oil and gas construction projects in /igeria. 1he research proposed recommendations to effecti-el" mitigate the top&fi-e major risks as follows<

59

1. 1he compulsor" land use act should be amended so that ade2uate compensation fees should be paid to the owners of the ac2uired lands b" oil and gas companies or the federal go-ernment. ). 'orporate social responsibilit" #'B=+ should be enforced b" the federal go-ernment so as to increase the de-elopment of these oil rich communities b" oil and gas companies. >. 1he federal go-ernment of /igeria should seek to enforce stringent laws on waste disposals so as to stop the oil spillages from acti-ities from oil and gas construction acti-ities. 9. 1he ?/A production should be introduced full" so as stop the flaring of gases which cause harm to human, animals and the entire ecological en-ironment in the /iger 5elta region. 5. :ffecti-e teamwork should be enhanced -ia staff training to update them with the new technologies and industr" skills. 6. Aood staffing b" effecti-el" matching project team members to the right projects where the" can function efficientl" to achie-e optimum producti-it". D. 3ndigenous companies partnering with the multinationals to impro-e cost effecti-eness. efficienc". 2ualit" of products and ser-ices. transparenc" and transfer of technolog", long term commitment and enhanced opportunit" for inno-ation. *. 'ontractor selection to be based on experience and pre-ious performance so that competent and experienced manpower will be carr"ing out design works efficientl". 9. 8sing concurrent engineering to impro-e constructabilit" and time sa-ings. 1 . 5esign standards put in place to enable regulators, clients and contractors to ha-e a mutual understanding about the wa" to carr" out designs. 11. 8sing 1LM #1otal Lualit" Management+ practices for enhancing the in-ol-ement of all project emplo"ees to share in the project -ision and goals. 1). :mpowering project managers with appro-als authorit" so as to make on time and faster decisions which enhances inno-ation and successful deli-er" of projects. 1>. 1he techni2ue, M'5M #Multiple criteria decision making+ should be fre2uentl" used for e-aluating contractors. 19. 'lients increasing legal enforcement of collusion b" impro-ing the detection of bidders during pre2ualification and final stages of e-aluation.

15. 'lients should be using selecti-e tendering b" in-iting onl" credible and professional contractors

8.,

6imitati ns % researc1

$ith regards to the gap in distance between the author and the target population. and the inflexible time schedule re2uired for completing the research, the choice of telephone inter-iews and the use of an electronic 2uestionnaire was the most suitable media for data collection for the research. Iowe-er, it was recogni(ed that the representation of the entire target population ma" not be repudiated from the respondents -iews because. not all the operators in the upstream and downstream sector of the /igerian oil and gas industr" ma" ha-e access to internet to facilitate the data collection process. /e-ertheless, the sample still continues to be a -alid and dependable information source since most of the corporate, public and pri-ate sector oil and gas organi(ations in /igeria ha-e internet access.

8.+

Rec mmendati ns % r %uture researc1

Ia-ing undertaken the research on risk management in oil and gas construction projects in /igeria. opportunities are open for future research to be aimed at using the ascertained major sources of risks and recommended strategies proposed in the research dissertation. for de-eloping a practical risk management model for future use b" clients, in-estors, researchers and all stakeholders that ha-e interest in the /igerian oil and gas industr".

61

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?ee, Q.B., Gim, Q., Gim, B.I., Gim, '., 'hung, '.I. and :1 Fung, $.5., #) 9+, 0nal"sis of human error and organi(ational deficienc" in e-ents considering risk significance, 9uclear /ngineering and 7e!ign, )> , pp. 61&6D. ?eed", ,.5. H Ormrod, F.:. #) 5+, Practical %e!earch: Planning and 7e!ign, *th edn, 'ollier&Macmillan, ,rentice Iall, /ew Ferse". ?ong, /.5., Ogunlana, B., Luang, 1. and ?am, G.'. #) 9+, ?arge construction projects in de-eloping countries< a case stud" from Jietnam, International ournal -" Pro*ect +anagement, -ol. )), /o. D, pp. 55>&561. ?ouca, ?.0., and Mohammed 0li, =.M. #) *+, 3mpro-ing the ductile beha-iour of offshore topside structures under extreme loads, /ngineering Structure!, > , pp. 5 6&5)1. ?uu, J.1., Gim, B.Q., /gu"en, J.1. and Ogunlana, B.O. #) *+, Luantif"ing schedule risk in construction ,rojects using ba"esian belief networks, International ournal o" Pro*ect +anagement, doi<1 .1 16Cj.ijproman.) *. >. >. Mills, 0. #) 1+, 0 s"stematic approach to risk management for construction, !tructural !ur0ey, Jol. 19, /o. 5, pp. )95&)5) Mohammed 0li, =.M. and ?ouca, ?.0., #) *+, ,erformance based design of blast resistant offshore topsides, ,art 3< ,hilosoph", ournal o" $on!tructional Steel %e!earch, 69, pp. 1 > &1 95 Munn, ,. and 5re-er, :. #199 +, )!ing :ue!tionnaire! in Small&Scale %e!earch, B'=:, Bcotland /aoum, B.A. #) D+, 7i!!ertation re!earch and 5riting "or con!truction !tudent!, )nd edn, 7utterworth&Ieinemann, Oxford, 8G /igerian /ational ,etroleum 'orporation #//,'+ #) *+, A'out 99P$. 0-ailable< http<CCwww.nnpcgroup.comCretail.htm R0ccessed )5 Ful" ) *S. /igerian /ational ,etroleum 'orporation #//,'+ #) *+, A'out 99P$. 0-ailable< http<CCwww.nnpcgroup.comCpotential.htm R0ccessed )5 Ful" ) *S. /igerian /ational ,etroleum 'orporation #//,'+ #) *+, A'out 99P$. 0-ailable< http<CCwww.nnpcgroup.comCaboutus.htm R0ccessed )5 Ful" ) *S. /igerian /ational ,etroleum 'orporation #//,'+ #) *+, 7o5n!tream -..ortunitie!. 0-ailable< http<CCwww.nnpcgroup.comCdownstream.htm R0ccessed )5 Ful" ) *S. /igerian /ational ,etroleum 'orporation #//,'+ #) *+, ).!tream -..ortunitie!. 0-ailable< http<CCwww.nnpcgroup.comCupstream.htm R0ccessed )5 Ful" ) *S. /wachukwu, '. #) *+ /igerian in-estors make steel, pipes for oil and gas industr", The Punch 9e5!.a.er, 1hursda", Ma" )9, ) *, pp. )>&)5. 65

Odeh, 0.M. and 7attaneih, I.1. #) )+, 'auses of construction dela"< traditional contracts, International ournal o" Pro*ect +anagement, -ol. ) , /o. 1, pp. 6D&D> Ogedengbe, ,.B. #) D+, 'ompulsor" ac2uisition of oil exploration fields in 5elta Btate /igeria< 1he compensation problem, ournal o" Pro.erty In0e!tment 3 1inance, Jol. )5, /o. 1, pp. 6)&D6. Ogunsemi, 5.=. and 0je, 3.O. #) 6+, 1he 3mpact of 'ontractors ,re2ualification on construction ,roject 5eli-er" in /igeria, Proceeding! o" the International $on"erence in the Built /n0ironment in the 21!t $entury ;I$IB/ 2<<=>, eds. F.J. 1orrance, I. 0dnan H =. 1akim, Guala ?umpur< Mala"sia, pp. 111&1) Okpala, 5.'., :-aluation and selection of construction projects in /igeria. $on!truction management and economic!, Jol. 9, /o. 1, 1991, Eebruar", 51&61. Olsen, F.:. #) )+, Alobal ethics and the 0lien 1ort 'laims 0ct< a summar" of three cases within the oil and gas industr", +anagement 7eci!ion, Jol. 9 , /o. D, pp. D) &D)9 ,alaneeswaran, :. H kumaraswam", M.M. #) 1+, =ecent ad-ances and proposed impro-ements in contractor pre2ualification methodologies, Building and /n0ironment, Jol. >6, /o. 1, pp. D>&*D. ,atterson, E.5. and /eaile", G. #) )+, 0 risk register database s"stem to aid the management of project risk, International ournal o" Pro*ect +anagement, Jol. ) , /o. 5, pp. >65&>D9. ,etroleum ,roducts ,ricing =egulator" 0genc" #,,,=0+ #) *+, 7eregulation Policy: A %e0ie5. 0-ailable< http<CCwww.pppra&nigeria.orgCarticledetails.aspO0rticle35K1 R0ccessed > 0ugust ) *S. ,etroleum ,roducts ,ricing =egulator" 0genc" #,,,=0+ #) *b+, Petroleum 1acilitie! in 9igeria. 0-ailable< http<CCwww.pppra&nigeria.orgCretailToutlets.asp R0ccessed > 0ugust ) *S. ,roject Management 3nstitute #,M3+ #) 9+, a guide to the Pro*ect +anagement Body o" ?no5ledge ;P+B-? guide>, >rd edn, ,M3, 8B0 ,roject Management 3nstitute #,M3+ #) +, a guide to the Pro*ect +anagement Body o" ?no5ledge ;P+B-? guide>, ,M3, 8B0 =afiu, 3. #) 5+, Accident! at retail outlet!, 5ail" 'hampion, ?agos.

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=oberts, 0. $allace, $. and Mc'lure, /., #) >+, Strategic %i!k +anagement, :dinburgh 7usiness Bchool, Ieriot&watt 8ni-ersit", :dinburgh, 8G. Bhaluf, 3.M. #) *+, 0 flare incident at an oil field, 7i!a!ter Pre0ention and +anagement, Jol. 1D, /o. 1, pp. 6&15. Bhen, ?.Q., $u, A.:.'. and /g, '.B.G. #) 1+, =isk 0ssessment for 'onstruction Foint Jentures in 'hina, ournal o" $on!truction /ngineering and +anagement, Jol.1)D, /o. 1, Fanuar"CEebruar"< pp. D6&*1. Bimmons, G. and 5uhane", 7. #) *+, :scra-os float&o-er installation dictates platform design, -""!hore maga6ine: 7rilling technology8India re.ort, 0pril, Jol. 6*, /o. 9, pp.1 )& 1 9. Bnell, =. #) *+, Offshore Btructures & Btandardi(ation, -""!hore Technology International, ) *, pp. 16D&169. Bte-ens, ,. #) 9). 5+, Oil markets, -A"ord %e0ie5 o" /conomic Policy, Jol. )1, /o. 1, pp. 19&

1chanko-a, ?. #) )+, =isk identification P basic stage in risk management, /n0ironmental +anagement and ,ealth, Jol. 1>, /o. >, pp. )9 &)9D. 1oor, B. and Ogunlana, B.O. #) *+, 'on2uering the 'onstruction 7attle< O-ercoming the problems on large construction projects in a de-eloping econom", Proceeding! o" the International con"erence in the Built /n0ironment in the 21!t $entury ;I$IB/ 2<<=>, eds. F.J. 1orrance and 0dnan, I. and 1akim, =., Guala ?umpur< Mala"sia, pp. 9D. 1hu"et, /.J., Ogunlana, B.O. and 5e", G.,., #) D+, =isk Management in Oil and Aas 'onstruction ,rojects in Jietnam, International ournal o" /nergy Sector +anagement, Jol. 1, 3ssue< ), pp. 1D5&199. $ard, B.'. #1999+, 0ssessing and Managing 3mportant =isks. International ournal o" Pro*ect +anagement, Jol. 1D, /o. 6, pp. >>1&>>6 $alliman, /. #) 5+, Bour %e!earch Pro*ect, )nd edn, B0A:, ?ondon

$illiams, '.0., Bmith, M.3. and Qoung, ,.'. #199*+, %i!k +anagement and In!urance, 3rwin, McAraw Iill $hittaker, 7. #1999+, $hat went wrongO 8nsuccessful information technolog" projects, In"ormation +anagement and $om.uter Security, Jol. D, /o. 1, pp. )>&)9. $isker, A. #) /ew Qork. *+, The Po!tgraduate %e!earch ,and'ook, )nd edn, ,algra-e, Macmillan,

$ong, '.I., Iolt, A.5. and 'ooper, ,.0. #) +, ?owest price or -alueO 3n-estigation of 8G construction clients; tender selection process, $on!truction +anagement and /conomic!, Jol. 1*, /o. D, ,,. D6D&DD9 6D

$orld 7ank #199D+, Corld 7e0elo.ment %e.ort, $orld 7ank, $ashington, 5' %afra&'abe(a, 0.%., =idao, M.0., 'amacho, :.E., #) *+, 8sing a risk&based approach to project scheduling< 0 case illustration from semiconductor manufacturing, /uro.ean ournal o" -.erational %e!earch, 19 , pp. D *&D)>.

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