The role of effective relationship management in successful large oil and gas projects

Abstract

Project success has been a central topic in the project management literature. The high volatility attended with oil and gas upstream projects has enhanced the need for relational contracting approaches. Successful Large International Engineering and Construction Projects can deliver value to project parties (clients, sponsors, contractors, subcontractors, etc.) and other stakeholders (users, investors, communities affected by the project, etc.) in the project supply chain. Supply chain and procurement strategies play a significant role in project success, due to their impact on project value and on the way project risks are managed. In this study, we review insights gleaned from 13 oil and gas senior procurement executives, from which we derive a set of propositions and some preliminary results related to the success of these elements. In general, we find that relationship management plays a critical role in the outcomes associated with oil and gas project success. Procurement relationship management practices affect the way the needs of project stakeholders outside the contract (users, suppliers, communities affected by the project, etc.) are attended as well as the way project relationships are managed inside and outside project teams. As a result, those strategies are also related to important drivers of project success, such as relationship and stakeholder management.