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UCL Australia Latest News

Matthew Flinders strengthens UCL’s links with Australia

Published: Jul 23, 2014 6:27:03 AM

UCL 'running ruler' over local expansion

Published: Jul 9, 2014 3:42:16 AM

Million pounds for UCL'’s Adelaide campus

Published: Jun 10, 2014 5:55:43 AM

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UCL Australia
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Research at UCL Australia

UCL School of Energy and Resources

Research in the School of Energy and Resources focuses on both the upstream and downstream development of energy and resources, covering a wide range of disciplines - from engineering and economics to environmental science and law. 

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Mullard Space Science Laboratory

The Mullard Space Science Laboratory (MSSL) is a world-leading research organisation delivering a broad science programme that is underpinned by a strong capability in space science instrumentation, space-domain engineering, space medicine, systems engineering and project management.

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International Energy Policy Institute

The International Energy Policy Institute (IEPI) was created to address key policy issues in the mineral, energy and resources industries through intensive and innovative research.

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Research at the IEPI

Professor Stefaan Simons

Professor Stefaan Simons

Petroleum Projects: Towards a relationship between level of definition and contracting strategies

Eduardo Carlesso Senger, BEng (Civil) (Hons)

Project submitted in partial fulfilment of the requirements for the degree of MSc (Energy and Resources), UCL School of Energy and Resources, Australia

Abstract

Oil and gas project contracts should have greater flexibility and a higher level of owner involvement and influence over their lifecycle to help mitigate relational risk between owner and contractor, according to my research. 

This could be achieved through improved project owner management competence and in particular project monitoring that in turn promotes relational reciprocity and trust between contract parties – key elements for successful project delivery.

Industry statistics report that more than 65% of megaprojects are failing to meet their sanction promise which can bring all sorts of problems to an organization. This poor industry performance can be generally attributed to the level of definition and planning achieved during the Front End Loading (FEL) phase.

The traditional model of engineering, procurement and construction lump-sum contract approach is no longer suitable. This type of contract has been widely used as a way of transferring execution risks to contractors and because of its potential to minimize total installed costs while providing project owners with some certainty in regards to overall costs. However, my research suggests today contracts need to be designed with flexibility to adapt to changes throughout the project lifespan without compromising the economics of the project.

This research analyses the relationship between the level of definition achieved during FEL and contracting strategies, with a view towards creating successful project performance. I found many problems of information asymmetry between owner and contractor, contract risk management and the importance of project controls for effective contracting.

Click here to read the full dissertation (PDF).