Structural modelling of internal risk factors for oil and gas construction projects
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 30 March 2020
Issue publication date: 21 August 2020
Abstract
Purpose
Project failure is the result of one or a combination of several causes of risk factors that are very important to identify for effective performance. This study aims to focus on studying the fundamental relationship between internal risk factors and the negative effect on oil and gas project success in Yemen using the partial least square structural equation modelling (PLS-SEM) method.
Design/methodology/approach
Data collection was carried out using a formal questionnaire survey of the oil field sector in Yemen by companies involved in mega-oil and gas construction projects. A hierarchical model for determining causative internal risk factors and their effects was developed and evaluated using SEM method by SmartPLS3 software technology.
Findings
The findings of analyzing model indicate that all categories have a significant effect on project success, while the most significant affected categories in the internal risk factors are project management factors, feasibility study-design and resources-material supply with a path coefficient value of 0.213, 0.197 and 0.186, respectively. Moreover, for the hypotheses test, the positive relationship means that all experimental hypotheses are accepted according to path coefficient value analysis. In addition, the internal risk factors research model shows the ranking of effects on project success starting with project stoppage (loading factor 0.841), cost overruns (loading factor 0.818), time overruns (loading factor 0.726) and project target failure with loading factor 0.539.
Research limitations/implications
The research was limited to the oil and gas construction projects in Yemen.
Practical implications
Interpreting the relationship between internal risk factors and their impact on the success of construction projects in the oil and gas sector will assist project team and oil companies in developing risk response strategies and developing appropriate plans to mitigate the effects of risks, which is presented in this paper.
Originality/value
The paper explains the relationship between cause and effect of internal risk factors in oil and gas projects in Yemen, and is expected to be a guideline for the oil companies and future academic research in the risk management area.
Keywords
Citation
A. Kassem, M., Khoiry, M.A. and Hamzah, N. (2020), "Structural modelling of internal risk factors for oil and gas construction projects", International Journal of Energy Sector Management, Vol. 14 No. 5, pp. 975-1000. https://doi.org/10.1108/IJESM-11-2019-0022
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited