Assistance in selecting a project contracting strategy by combining complex systems theory and risk and vulnerability analysis

Abstract

Oil and gas development projects involve many contracts for engineering studies, item procurement, construction workforce, installation or commissioning. One key component of such projects is the definition of a contracting strategy, which consists of breaking the project down into work packages that will be awarded to contractors with specific remuneration and supervision modes. Indeed, it links global design with the local contracts and internal activities that must be undertaken to deliver the results. Risks are associated with every contract as well as with the interfaces between the client and contractor and between the contractors themselves. The problem is then to select an adequate contracting strategy, considering the risks that may occur before or after signing a contract, with direct and possibly indirect and higher impacts. This communication aims to present a method for analyzing the risks of such contracting strategies. The analysis focuses on technical and organizational interfaces, notably contractual ones that exist within these alternative strategies. The expected result is a risk analysis process and tool, which is included in the global project contracting strategy selection process. An industrial application in an international oil and gas company will be presented.