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4.3.

Educational qualification:

The questionnaire results obtained with respect to educational qualification show that each of the respondents possessed at least a form of higher educational qualification (MBA, Msc, Bsc and Beng). This implies that the decision makers who are involved in carr ing out risk management practices in !igerian oil and gas pro"ects are educated. 4.3.4 Respondents age group:

Table 4-4: Results of respondents age group


S/No 1 2 3 4 5 6 Respondents age group 25 to 30 Years 31 to 35 Years 36 to 40 Years 41 to 45 Years 46 to 50 Years >50 Years Frequency 2 12 3 7 5 1 Percentage (%) 7 40 10 23 17 3

Figure 4-3: Distribution of respondents age group

>50 Years 3% 46 to 50 Years 17%

25 to 30 Years 7%

31 to 35 Years 40% 41 to 45 Years 23%

36 to 40 Years 10%

The above table and chart (Table #$# and %igure #$&) shows that the percentage distributions of the respondents' age groups in the surve are as follows( )* (+) are +, to &- ears. #-* (/+) are &/ to &, ears. /-* (&) are &0 to #- ears. +&* ()) are #/ to #, ears. /)* (,) are #0 to ,- ears. and &* (/) are above ,- ears. %rom the obtained results, it was noticed that the age group with the highest frequenc (modal age group) were between &/ to &, ears of age. Also, all the respondents from #/ ears and above were managers. 1t can be inferred that a considerable number of managers are activel involved in risk management practices in !igerian oil and gas industr . 4.3.5 Types of pro ects e!ecuted by respondents:

The !igerian oil and gas industr was identified from e2tant literature to be divided into two sectors and as indicated in the questionnaire. respondents were requested to select the sector where the carr out their pro"ect activities. Table #$, shows the surve results.

Table 4-5: Results of pro ect types e!ecuted by respondents


S/No 1 2 3 Type of projects executed by respondents Only upstream Only downstream Both Frequency 0 3 27 Percentage (%) 0 10 90

Figure 4-4: Distribution of pro ect types e!ecuted by respondents


Both 90%

Only dow nstream 10%

Only upstream 0%

The above table and chart (Table #$, and %igure #$#) shows that the percentage distributions of the respondents' with respect to the oil and gas sector. where the carr out their pro"ects activities are as follows( &* (/-) carr out onl downstream pro"ect activities. 3-* (+)) carr out both upstream and downstream pro"ect activities. and none of the companies carr out onl upstream activities. %rom 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 pro"ect activities while others (design4construction, inspection, and drilling4e2ploration) companies. carr out their pro"ect activities in both sectors which ma be offshore or onshore. 1t can be inferred that risk management practices carried out on most of the pro"ects in both the upstream and downstream sectors of !igerian oil and gas industr . 4.3." #er$ices rendered by organi%ations:

&

1n the questionnaire surve . respondents were requested to select the t pe of pro"ects services that their individual organi5ations where the carr out their pro"ect activities. render in !igerian oil and gas industr . The table below shows the surve results. Table 4-": Results of pro ect ser$ices rendered by respondents
S/No 1 2 3 4 Type of projects services rendered by respondents Inspe t!on "es!#n$ onstru t!on &eta!l$mar'et!n# "r!ll!n#$e(plorat!on Frequency 4 1% 4 4 Percentage (%) 13 61 13 13

Figure 4-5: Distribution of pro ect ser$ices rendered by respondents


13% 13% 13% Inspe t!on "es!#n$ onstru t!on &eta!l$mar'et!n# "r!ll!n#$e(plorat!on 61%

The above table and chart (Table #$0 and %igure #$,) shows that the percentage distributions of the respondents' with respect to the services that their individual organi5ations render in !igerian oil and gas industr are as follows( /&* (#) are involved in inspection activities. 0/* (/6) are involved in design and construction activities. /&* (#) are involved in retail and marketing activities. and /&* (#) are involved in drilling and e2ploration activities. %rom the obtained results and from in$depth telephone interviews, it was gathered that. !igerian government owned public sector companies like 789, were involved in inspecting and regulating the wa the other companies (design4construction, inspection, and drilling4e2ploration) carr out risk management practices in both upstream and downstream oil and gas pro"ects. This the do b giving them guidelines on the risk assessment methodolog and when to use them on pro"ects. (789, +--0) The retail and marketing companies were private indigenous companies that carr # out their pro"ect

activities onl in the downstream sector. Most of the drilling and e2ploration companies were private multinationals that have "oint ventures with !!8: (the owner of and !igerian government representative. in all oil and gas pro"ects). (!!8:, +--6) This is because of the inabilit of the private indigenous companies' lack of finance and e2pertise to carr out these high technolog and huge capital intensive pro"ects. 0/* distribution was comprised of mostl the private indigenous companies that carr out most design and construction pro"ects which were sublets from the multinational companies. This large percentage is because of the new !igerian ;ocal content polic to carr out )-* of all design and construction pro"ects in the oil and gas sector b the ear +-/-. (!wachukwu, +--6) This boosted the springing up of new design and construction companies. <ith respect to the ob"ectives of the research, it can be inferred that risk management practices carried out b the various companies in !igerian oil and gas pro"ects are regulated and monitored under strict guidelines b !igerian government bodies responsible for ensuring that pro"ect risks are effectivel managed and responded to. at the various ke stages of oil and gas pro"ects. 4.3." &rgani%ations years of e!perience:

Table 4-': Results of respondents organi%ations years of e!perience


S/No 1 2 3 3 Respondents organi ations years of experience )ess than 5yrs 5 to 10yrs 10 to 20yrs 20yrs and a*o+e Frequency 0 2 6 22 Percentage (%) 0 7 20 73

Figure 4-": Distribution of respondents organi%ations years of e!perience

73% )ess than 5yrs 5 to 10yrs 10 to 20yrs 20% 7% 0% 20yrs and a*o+e

The above table and chart (Table #$) and %igure #$0) shows that the percentage distributions of the respondents' individual organi5ations ears of e2perience in !igerian oil and gas industr are as follows( )* (+) have , to /- ears. +-* (0) have /- to +- ears. and )&* have above +- ears of e2perience. Two companies involved in design and construction were in the , to /- ears of e2perience range. The rest had above /- ears e2perience in the !igerian oil and gas industr . <ith respect to the organi5ations that participated in the research surve , it can be seen that most of the companies have been operating in the oil and gas sector for long. Thus, it can be inferred that most of the organi5ations that partook in the surve are ver e2perienced in oil and gas pro"ects. 4.3.' E(ployee si%e:

Table 4-): Results of respondents organi%ations e(ployee si%e


S/No 1 2 3 4 5 Respondents organi ation!s e"p#oyee si e 1 to 100 100 to 250 250 to 1000 1000 to 5000 ,*o+e 5000 Frequency 0 0 4 1% % Percentage (%) 0 0 13 60 27

Figure 4-': Distribution of respondents organi%ations e(ployee si%e

,*o+e 5000 27%

250 to 1000 13%

1000 to 5000 60%

The above table and chart (Table #$6 and %igure #$)) shows that the percentage distributions of the respondents' individual organi5ations emplo ee si5e are as follows( /&* (#) have +,- to /--- emplo ees. 0-* (/6) have /--- to ,--- emplo ees. and +)* have above ,--- emplo ees. Medium si5ed design and construction companies were the respondents in the third categor (+,- to /---) emplo ees. while large si5ed indigenous multinationals, public sector government organi5ations and retail and marketing companies had from /--- to ,---= emplo ees. This is because these large si5ed organi5ations have been in e2istence for man ears and carr out oil and gas pro"ects in their subsidiaries which are spread around the nation. Thus, it can be inferred that since the large si5ed organi5ations constitute a total of 6)* of the surve . the are more organi5ed and have abundance of emplo ees who carr out risk management on their various oil and gas pro"ects. 4.4 #ection *: Ris+ (anage(ent rationale

1n line with the ob"ectives of the research, this section of the questionnaire will be used to anal 5e the risk management practices carried out b the respondents in the surve . The questions seek to find out how organi5ations identif the sources of risks. the risk response techniques the use. and an anal sis of the ma"or risks that emanate in !igerian oil and gas pro"ects will be carried out so as to determine the five ma"or risks that impede the pro"ects. This will be further anal 5ed so as to determine suitable response strategies for these risks. 4.4., &rgani%ations and ris+ (anage(ent syste(: results. all the respondents agreed that their individual

1n the questionnaire surve

organi5ations maintained a risk s stem. All also agreed that the identified risks are stored in a risk management database either b recording the risks in a risk register, documenting )

and storing them as hardcop files. or b storing them as folders electronicall , inside computer hard discs, flopp mitigate risks on pro"ects. drives or compact discs. This implies that oil and gas organi5ations pa significant attention to risk management practices so as to effectivel

4.4.*

Ris+ ran+ing for -igerian oil and gas construction pro ects:

1n the questionnaire surve . the respondents which were thirt (&-) in number. were asked to rate a list of twent (+-) risks which were identified from e2tensive phone interviews to be the most common sources of risks that emanate in !igerian oil and gas pro"ects. The average risk scores from the &- respondents was used to derive the risk inde2 score b putting the numerical values as proposed earlier in equation #.&. This is represented with the formula below(
30

RI =
i

R
j =1

>>>>>>>>>>>>>> equation 4.4

30

<here.

RI i ? 9isk$inde2 score for risk i Rij ? 9isk score assessed b respondent " for risk i 30 = !umber of respondents

The ranking of the identified top twent (+-) risks was carried out with respect to the risk inde2 score so as to determine the top five (,) ma"or risks so as to further anal 5e and develop suitable mitigating strategies for these risks in line with the research ob"ectives. This is similar to a stud carried out b Thu et et al., (+--)). The questionnaire results can be shown in table #$3 as follows(

Table 4-.: Ris+ ran+ing for -igerian oil and gas construction pro ects 9ank / + & # , 0 ) 6 3 /// /+ /& 9isk :ode 9/+./, 9/+., 9/+.0 9/+.) 9/+.3 9/+./# 9/+./9/+.// 9/+./& 9/+.& 9/+./) 9/+./6 9/+./ 9isk factors @ecurit threats from neighboring residents 1ncompetence of pro"ect team members 8oor designs ;ate internal approvals from clients 8oor and inadequate tendering 1nadequate pro"ect organi5ation structure :hanges in design 1nadequate budgeting and poor pro"ect planning 8oor pro"ect feasibilit studies 1nefficient and poor performance of constructors 9educed qualit in procured materials 8oor coordination amongst sub$contractors and contractors 7amage to work b third part 3 91 -.,0+/ -.&6+& -.&), -.+3)# -.+6// -.+)## -.+#,6 -.+&)6 -.++)6 -.+/+, -.+-36 -./30, -./)0#

/# /, /0 /) /6 /3 +-

9/+.6 9/+./+ 9/+.+ 9/+.# 9/+./0 9/+.+9/+./3

Bureaucratic pro"ect and government approval procedures 7ifferences in practices between local and foreign contractors Anvironmental protection pressure of other groups 8oor relationship with government bodies ;ate provision or deliver of materials <orking conditions deferring from contract specification ;ack of e2perience in design and construction

-./00, -./0&6 -./,3+ -./#,+ -./#,+ -.///+ -./-60

A comprehensive list of the ranked risks as deduced from a combination of in$depth telephone interviews and questionnaire surve is shown in the table above. The twent (+-) risks are sorted accordingl , in ascending order of their overall impact on oil and gas pro"ects in !igeria. The top ten risks will then be anal 5ed further to determine their features, characteristics and causes. so that adequate strategies can be proposed to mitigate the risks. 4.4.3 T/e analysis of t/e top ten ris+s in -igerian oil and gas construction pro ects:

1n line with the ob"ectives of the stud , the top ten ma"or risks in !igerian oil and gas pro"ects will be anal 5ed thoroughl . 1n order to anal 5e these top ten ma"or risks. the mean of occurrence and the mean of impact degree for each individual risk identified b the respondents where determined. This can be seen as shown in table #$/- as follows(

/-

Table 4-,0: Top ten ris+s statistics for -igerian oil and gas construction pro ects Mean of Mean of Bccurrence 1mpact %requenc 7egree (%r) (1m) -.) -.,/&& -.#3&& -.+0 -.,&&& -.#+0) -.#00) -.,0 -.#+0) -.#+ -.#+0) -.0-0) -.)0 -.0,&& -.06 -.#6&& -.,+0) -.,3&& -.#6 -.#+0) -.#60) -.#)&& -.#,&& -.&+0) 9isk 1nde2 @core (91) -.,0+/ -.&6+& -.&), -.+3)# -.+6// -.+)## -.+#,6 -.+&)6 -.++)6 -.+/+, -.+-36 -./30,

9ank / + & # , 0 ) 6 3 /// /+

9isk code 9/+./, 9/+., 9/+.0 9/+.) 9/+.3 9/+./# 9/+./-

9isk %actors @ecurit threats from neighboring residents 1ncompetence of pro"ect team members 8oor designs ;ate internal approvals from clients 8oor and inadequate tendering 1nadequate pro"ect organi5ation structure

:hanges in design 1nadequate budgeting and poor pro"ect 9/+.// planning 9/+./& 9/+.& 9/+./) 9/+./6 1mproper pro"ect feasibilit studies 1nefficient and poor performance of constructors 9educed qualit in procured materials 8oor coordination amongst sub$ contractors and contractors //

/& /# /, /0 /) /6 /3 +-

9/+./ 9/+.6 9/+./+ 9/+.+ 9/+.#

7amage to work b third part Bureaucratic pro"ect and government approval procedures 7ifferences in practices between local and foreign contractors Anvironmental protection pressure of other groups 8oor relationship with government bodies

-.+)&& -.&# -.&6 -.+,&& -.+)&& -.&+ -.+&&& -.+,&&

-.) -.#00) -.&-0) -.,0 -..#3&& -.#-0) -.&/&& -.+3&&

-./)0# -./00, -./0&6 -./,3+ -./#,+ -./#,+ -.///+ -./-60

9/+./0 ;ate provision or deliver of materials <orking conditions deferring from 9/+.+contract specification ;ack of e2perience in design and 9/+./3 construction

%rom table #$/- above, it can be deduced that Csecurit threats from neighboring residents' risk take up the first position with a risk$inde2 score (-.,0+/), to become the risk with the highest risk score$inde2. This is an e2ternal risk and has both the highest mean of impact degree (-.)0) and the highest mean of occurrence frequenc (-.)). 1t implies that oil and pro"ects in !igeria are highl prone to this ma"or risk. 1t was gathered from the conducted interviews that the main causes of this risk were disturbances from the local residents and militants in the !iger 7elta region in the form of assault and kidnapping of oil and gas companies emplo ees. vandali5ing of oil and gas pipelines. and sabotage (fire and e2plosion of oil and gas facilities). 1t was also gathered that due to lack of compensation pa ment which was supposed to be paid to the poor rural dwellers of these oil rich regions for the compulsor acquisition of their lands for oil and gas e2ploration. alwa s generates crisis in the area. (Bgedengbe, +--)) The second to the fifth risks are as follows( C1ncompetence of pro"ect team members' with a risk$inde2 score (-.&6+&). Cpoor designs' with a risk$inde2 score (-.&),). Clate internal approvals from clients' with a risk$inde2 score (-.+3)#). and Cpoor and inadequate tendering' with a risk$inde2 score (-.+6//). %rom the second down to the tenth (+nd to /-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 activities of the client. The /+ are as follows(

C1ncompetence of pro"ect team members' as the +nd. Clate internal approvals from clients' as the #th. Cinadequate pro"ect organi5ation structure' as the 0th. Cinadequate budgeting and poor pro"ect planning' as the 6th and Cimproper pro"ect feasibilit studies' as the 3 th. The fact that these management associated risks have high ranking signifies that clients and emplo ers in !igerian oil and gas construction pro"ects are failing in their duties of directing. motivating emplo ees. organi5ing. controlling. and planning oil and gas pro"ects. %rom the interviews conducted, it was revealed that the reason for these lapses accrue to lack of a defined s stem in pro"ects' structure and incompetent workers being used on pro"ects. Thus, it can be inferred that. in order to manage these risks, there should be a focus on improving clients' management skills, abilities and knowledge as well as emplo ees capabilities. 1t is worth noting that two risks which had high risk ranking. and found their places as the &rd and )th in the top ten risk ranking were associated with the designs. The are( Cpoor designs' with a risk$inde2 score (-.&),). and Cchanges in design' with a risk$inde2 score (-.+#,6). C8oor designs' risk although occupied the overall third position, had the second highest mean of impact degree (-.0,&&). This is because design works which are done at the earl stages of oil and gas pro"ects have a ver huge impact on the total outcome of pro"ects. A little flaw in a design can cause enormous changes in the construction phase and in allocating resources. thus, reducing qualit pro"ects. (Thu et, et al., +--)) C:hanges in design' risk is common in oil and gas pro"ects and the earlier it occurs, the lesser it has impact on the total pro"ect outcome. 1t usuall occurs in the construction phase of !igerian oil and gas pro"ects. This risk had -.#6 as the mean of impact degree and this implies that changes in design in !igerian oil and gas pro"ects have a medium effect or impact on the overall pro"ect outcome. %rom the interviews, it was gathered that this risk is usuall caused b changes in design specifications, scope changes and poor qualit designs. To 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. (@nell, +--6) and causing cost and time overruns on

/&

C8oor and inadequate tendering' risk had the ranking position as ,th. with a risk$inde2 score (-.+6//), mean of impact degree (-.,+0)) and mean of occurrence frequenc (-.,&&&). This means that this risk has a severe impact on pro"ect outcomes. %rom the interviews, it was revealed that risks associated with tendering in oil and gas pro"ects in !igeria are attributed to poor contractor selection b clients. 1ncompetent and unreliable contractors end up winning bids due to inadequacies in the evaluation processes and selection criteria which lacked Cdue processes'. Thus, contractors are appointed b public and private sector clients' not on merit but based on whom the know. (Bgunsemi and A"e, +--0) This makes contactor and client ethics during contractor selection and evaluation processes a comple2 and sensitive issue et to be addressed in !igerian oil and gas pro"ects. The /-th risk Cinefficient and poor performance of constructors' with a risk$inde2 score (-.+/+,). mean of impact degree (-.#)&&). and mean of occurrence frequenc (-.#+). This risk was identified to be a ver sensitive risk that needs to be addressed in !igerian oil and gas industr . :lients' pro"ects often end up suffering from overruns in cost, dela s in time, poor qualit services and decreased productivit due to poor performance on the contractor side. 1n$depth interviews revealed that lack of sufficient equipments and technolog . appropriate e2perience. financial capabilit . trained emplo ees. available resources. good qualit construction methods. and efficient management skills. were the causes of contractors poor performance on pro"ects. Besides, !igeria oil and gas pro"ects which are usuall large and comple2, requiring huge capital investment, modern technologies and ever changing up to date construction methods. attracts multinational companies. :onsequentl , conflicts that impede pro"ect successes are often generated due to the differences in technolog indigenous companies. 4.5 Ris+ response strategies for (itigating t/e (a or ris+s of occurrence and degree of impact. 1n line with the know how between the emplo ees of multinational and

1n the previous section, the top ten ma"or risks in !igerian oil and gas pro"ects were identified with their frequenc ob"ectives of the stud and due to the time constraints and limits of the research. qualitative method of research was used via telephone interviews with e2perienced personnel of the !igerian oil and gas industr . to find out the characteristics and causes as well as to propose efficient strategies to effectivel mitigate onl the five ma"or risks on the risk /#

ranking developed from the quantitative anal sis because of the severe impacts the have on oil and gas pro"ects in !igeria. This section will focus on anal 5ing each individual risk thoroughl . 4.5., #ecurity t/reats fro( neig/boring residents 1R,*.,52

The risks accruing to securit threats from neighboring residents on !igerian oil and gas pro"ects are enormous. These are e2ternal risks that inhibit the achievement of a pro"ect's cost, time and qualit ob"ectives. 1t was gathered from the conducted interviews that the agitating ouths and militants activities on oil and gas fields in the form of assault and kidnapping of oil and gas companies emplo ees (Awe"e, +--)). vandali5ing of oil and gas pipelines. and sabotage (fire and e2plosion of oil and gas facilities). 1t 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 acquisition of their lands for oil and gas e2ploration. alwa s generates crisis in the area. (Bgedengbe, +--)) 1n this light, the respondents to the interview that were carried out proposed several strategies which include( /. The compulsor land use act should be amended so that adequate compensation fees should be paid to the owners of the acquired lands b oil and gas companies or the federal government. +. :orporate social responsibilit (:@9) (Avuleocha, +--,) should be enforced b the federal government so as to increase the development of these oil rich communities b oil and gas companies. &. The federal government of !igeria should seek to enforce stringent laws on waste disposals so as to stop the oil spillages from activities from oil and gas construction activities. (Assoka, et al., +--0) #. The ;!D production should be introduced full so as stop the flaring of gases which cause harm to human, animals and the entire ecological environment in the !iger 7elta region. (Dalbraith, +--6) 4.5.* 3nco(petence of pro ect tea( (e(bers 1R,*.52

/,

%rom the phone interviews, it was gathered that the !igerian oil and gas pro"ects lack individuals with skills, knowledge and abilit to perform their duties efficientl . Aven though most pro"ect 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 pro"ects. 1n this view, the following strategies were proposed b the interviewees as follows( /. Affective teamwork should be enhanced via staff training to update them with the new technologies and industr skills. +. Dood staffing b effectivel matching pro"ect team members to the right pro"ects where the can function efficientl to achieve optimum productivit . 4.5.3 4oor designs 1,*."2

The risks of poor designs b contractors in !igerian oil and gas pro"ects are enormous, and usuall cause the non$achievement of pro"ects' cost, time and qualit ob"ectives. <ho absorbs the e2tra cost of incomplete or unclear scopes and specifications, ambiguous design and designers' incompetenceE This question usuall causes a lot of conflict between clients and contractors. 1n !igeria, indigenous companies have little e2perience in design of oil and gas facilities, thus there e2ists a dominance of foreign multinational companies that have more e2perience but still run into design difficulties due to the comple2 nature of the designs in the industr . 1n this light, the respondents to the interview that were carried out proposed several strategies which include (Thu et, +--))( /. 1ndigenous companies partnering with the multinationals to improve cost effectiveness. efficienc . qualit of products and services. transparenc and transfer of technolog , long term commitment and enhanced opportunit for innovation. +. :ontractor selection to be based on e2perience and previous performance so that competent and e2perienced manpower will be carr ing out design works efficientl . &. Fsing concurrent engineering to improve constructabilit and time savings. #. 7esign standards put in place to enable regulators, clients and contractors to have a mutual understanding about the wa to carr out designs. (@nell, +--6)

/0

4.5.4

5ate internal appro$als fro( clients 1,*.'2

This is an internal pro"ect risk that usuall originates in clients organi5ation. The interview respondents revealed that this risk emanates on !igerian oil and gas pro"ects due to managers lacking the authorit 8ro"ect managers are usuall to solve problems and lack of emplo ee commitment. faced with the problem of slow responses from the top

management to pressing pro"ect issues e.g. allocating resources. This leads to time and at times lead to cost overruns on pro"ects. (Thu et, +--6) 1n this light, the respondents to the interview that were carried out proposed the following strategies( /. Fsing TGM (Total Gualit Management) practices for enhancing the involvement of all pro"ect emplo ees to share in the pro"ect vision and goals. +. Ampowering pro"ect managers with approvals authorit so as to make on time and faster decisions which enhances innovation and successful deliver of pro"ects.

4.5.5

4oor and inadequate tendering 1,*..2

The risk accruing to poor and inadequate tendering usuall , can deviate a pro"ect from meeting up with its ob"ectives. Bil and gas pro"ects usuall adopt one of the following methods. restricted tendering, open tendering, restricted accelerated, competitive negotiated, competitive negotiated accelerated tendering and dialogues. (8alaneeswaran and kumaraswam , +--/) The interviews revealed that lack of Cdue processes' (unethical attitudes of bidders) and Cinadequate evaluation criteria' are the main sources that pose tendering risks in !igerian oil and gas industr . 8ublic sector clients often accept lowest price tender so as to show accountabilit and in defense for criticisms. (<ong, et al., +---) Moreover, these bidders submit low prices to win and after winning, the negotiate with clients at later stages to mark$up their tender. Another identified source is the collusion of bidders like withdrawal, briber , and false inflation of covering and tender prices. 1n this light, the respondents to the interview that were carried out proposed the following strategies( /. The technique, M:7M (Multiple criteria decision making) should be used for evaluating contractors. /)

+. :lients increasing legal enforcement of collusion b improving the detection of bidders during prequalification and final stages of evaluation. &. :lients using selective tendering b contractors 4." #u((ary inviting onl credible and professional

The quantitative and qualitative approaches were used to assess the ma"or risks that emanate in !igerian oil and gas construction pro"ects. The findings from results from the background information of the questionnaire surve reveals that risk management practices in !igeria oil and gas industr involves people with high industr e2perience. educated. and mostl carr out pro"ects in both upstream and downstream sector. Most of the organi5ations have e2perience in oil and gas activities because the have been in e2istence long enough in the industr . with adequate staff strength. The second part the questionnaire revealed that all organi5ations 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 drives, compact discs and flopp drives. The top ten ma"or risks that emanate on oil and gas construction pro"ects both in the upstream and downstream oil and gas sectors are( ,.+ @ecurit threats from neighboring residents 0.+ 1ncompetence of pro"ect team members ).+ 8oor designs 6.+ ;ate internal approvals from clients 3.+ 8oor and inadequate tendering /-.+ 1nadequate pro"ect organi5ation structure //.+ :hanges in design /+.+ 1nadequate budgeting and poor pro"ect planning /&.+ 1mproper pro"ect feasibilit studies /#.+ 1nefficient and poor performance of constructors

/6

Gualitative method was used via in$depth telephone interviews. to further anal 5e the top five ma"or risks due to their high mean of impact degree and high risk inde2 score thoroughl . The causes and characteristics of the top five ma"or risks. as well as mitigating strategies were developed to curb the top five ma"or risks that emanate on !igerian oil and gas pro"ects.

6/apter 5: 6onclusion and reco((endations


*., 6onclusion:

1n recent times, the concept of risk management is an essential process that cannot be neglected in the management of pro"ects in developed countries. !evertheless, the practice is still new during the implementation of pro"ects in developing countries. which includes !igeria. Bnl the !igerian oil and gas sector seems to be the sector amongst others. that is keen on utili5ing risk management practices during the implementation of pro"ects because of the volatile nature of products and characteristics of the pro"ect environment where the operation and processes are carried out, in a constantl changing d namic environment which is e2posed to enormous risks. Thus, this research is ver significant and timel considering the fact that the oil and gas sector is the most important contributor to the total revenue of the !igerian econom .

/3

The research dissertation which aimed at identif ing the risk factors that affect oil and gas construction pro"ects and to derive risk responses for them was accomplished via reali5ing the following research ob"ectives( The different t pes of risks as well as the different environments where these risks originate in oil and gas pro"ects where identified from an e2tensive literature review. A closer assessment via a questionnaire surve was s stematicall used to determine the frequenc of occurrence and the degree of impact of the ma"or sources of risks that emanate in oil and gas construction pro"ects in !igeria. The results of the research via the risk scores of the ma"or risks revealed that the top ten ma"or risks in oil and gas construction pro"ects in !igeria were( /. @ecurit threats from neighboring residents +. 1ncompetence of pro"ect team members &. 8oor designs #. ;ate internal approvals from clients ,. 8oor and inadequate tendering 0. 1nadequate pro"ect organi5ation structure ). :hanges in design 6. 1nadequate budgeting and poor pro"ect planning 3. 1mproper pro"ect feasibilit studies /-. 1nefficient and poor performance of constructors

5.*

Reco((endations

%or the successful deliver of pro"ects, it is essential that a thorough e2amination of the ma"or risks affecting a pro"ect is e2amined. 1n the quest to develop strategies to effectivel mitigate the identified ma"or risks. literature and in$depth interviews were carried out in the research and were used to proffer appropriate practical strategies which where proposed for the top five most ranked, ma"or risks in oil and gas construction pro"ects in !igeria. The research proposed recommendations to effectivel mitigate the top$five ma"or risks as follows(

+-

/. The compulsor land use act should be amended so that adequate compensation fees should be paid to the owners of the acquired lands b oil and gas companies or the federal government. +. :orporate social responsibilit (:@9) should be enforced b the federal government so as to increase the development of these oil rich communities b oil and gas companies. &. The federal government of !igeria should seek to enforce stringent laws on waste disposals so as to stop the oil spillages from activities from oil and gas construction activities. #. The ;!D production should be introduced full so as stop the flaring of gases which cause harm to human, animals and the entire ecological environment in the !iger 7elta region. ,. Affective teamwork should be enhanced via staff training to update them with the new technologies and industr skills. 0. Dood staffing b effectivel matching pro"ect team members to the right pro"ects where the can function efficientl to achieve optimum productivit . ). 1ndigenous companies partnering with the multinationals to improve cost effectiveness. efficienc . qualit of products and services. transparenc and transfer of technolog , long term commitment and enhanced opportunit for innovation. 6. :ontractor selection to be based on e2perience and previous performance so that competent and e2perienced manpower will be carr ing out design works efficientl . 3. Fsing concurrent engineering to improve constructabilit and time savings. /-. 7esign standards put in place to enable regulators, clients and contractors to have a mutual understanding about the wa to carr out designs. //. Fsing TGM (Total Gualit Management) practices for enhancing the involvement of all pro"ect emplo ees to share in the pro"ect vision and goals. /+. Ampowering pro"ect managers with approvals authorit so as to make on time and faster decisions which enhances innovation and successful deliver of pro"ects. /&. The technique, M:7M (Multiple criteria decision making) should be frequentl used for evaluating contractors. /#. :lients increasing legal enforcement of collusion b improving the detection of bidders during prequalification and final stages of evaluation.

+/

/,. :lients should be using selective tendering b professional contractors

inviting onl

credible and

5.3

5i(itations of researc/

<ith regards to the gap in distance between the author and the target population. and the infle2ible time schedule required for completing the research, the choice of telephone interviews and the use of an electronic questionnaire was the most suitable media for data collection for the research. However, it was recogni5ed that the representation of the entire target population ma not be repudiated from the respondents views because. not all the operators in the upstream and downstream sector of the !igerian oil and gas industr ma have access to internet to facilitate the data collection process. !evertheless, the sample still continues to be a valid and dependable information source since most of the corporate, public and private sector oil and gas organi5ations in !igeria have internet access.

5.4

Reco((endations for future researc/

Having undertaken the research on risk management in oil and gas construction pro"ects in !igeria. opportunities are open for future research to be aimed at using the ascertained ma"or sources of risks and recommended strategies proposed in the research dissertation. for developing a practical risk management model for future use b clients, investors, researchers and all stakeholders that have interest in the !igerian oil and gas industr .

++

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