TX 75083-3836, U.S.A., fax 01-972-952-9435. AbstractManagement teams across the globe have and will continue to bet on major capital projects to drive their companies' performance. Capital committed to these mega-projects has increased at a compounded average growth rate of over 12% over the last decade, and this trend is expected to continue over the next decade. To manage the shareholder value at risk in these projects, almost every major oil and gas company has invested heavily in a formal stage-gate project management process. Yet the performance of major projects has not appreciably improved, and significant project failures-both technical and economic-continue to occur.We have investigated how the application of these state-ofthe-art processes has gone astray in the oil and gas industry. We identify the key organizational and technical shortcomings that are diminishing project performance and suggest the topten actions management can take to gain significant competitive advantage.