Risk Management in Oil and Gas Construction Projects in Developing Countries: the Case of Iraq

There is great pressure on oil and gas sector in developing countries to increase production. Production can be increased by executing oil and gas construction (OGC) projects for new facilities or upgrade existing facilities. OGC projects are complex, risky and often contain cost and time overruns. Therefore, this research aims to identify, assess and derive responses for risk factors affecting OGC projects in Iraq. Risks were identified through literature review and semi-structured interviews with practitioners in OGC projects. A questionnaire was conducted with participation of 53 managers and employees in OGC projects to assess risks. Risk were assessed and ranked by determining risk criticality index using statistical analysis. Responses for major risks were suggested by informal interviews with practitioners on OGC projects. Results shows that most critical risks are corruption, bad security situation, inefficiency of local contractors, payment delay of contractors’ dues, and inefficiency of legal process in Iraq. Research findings help organizations to implement OGC projects successfully in Iraq and in developing countries with similar environment.