Managing Cost Risks in Oil and Gas Construction Projects: Root Causes of Cost Overruns
Publication: ASCE-ASME Journal of Risk and Uncertainty in Engineering Systems, Part A: Civil Engineering
Volume 8, Issue 1
Abstract
This study identifies and classifies the root causes (i.e., the primary precursors) of cost overruns in oil and gas construction projects. Past studies generally focused on identifying the most immediate precursors of cost overruns and failed to address the need to identify their root causes. Specific root causes are inherent in projects with certain characteristics (e.g., projects in a particular domain or sector). Accordingly, research is needed to identify various cost overrun factors and their root causes in a context-specific manner. This study used content analysis to identify 38 recurrent cost overrun factors and 11 root causes in oil and gas construction projects. The cost overrun factors were classified based on their common root causes. The Delphi method was used to verify this classification. The evidence from 12 construction projects in the oil and gas sector that had faced cost overruns was used to verify the outcome of this study. The findings of the study will assist practitioners in mitigating the risk of cost overruns in oil and gas projects and meeting their budget goals.
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Data Availability Statement
All data, models, or code that support the findings of this study are available from the corresponding author upon reasonable request.
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ASCE-ASME Journal of Risk and Uncertainty in Engineering Systems, Part A: Civil Engineering
Volume 8 • Issue 1 • March 2022
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© 2021 American Society of Civil Engineers.
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Received: May 23, 2021
Accepted: Aug 18, 2021
Published online: Oct 19, 2021
Published in print: Mar 1, 2022
Discussion open until: Mar 19, 2022
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