A Risk Analysis‐Best Worst Method Based Model for Selection of the Most Appropriate Contract Strategy for Onshore Drilling Projects in the Iranian Petroleum Industry

Abstract

The pre-project planning phase has a significant impact on the achievement of project objectives because during this stage, major decisions including involving contract strategies are made with a high degree of uncertainty. Studies show that the contract type can play a unique role in the achievement of project success. On the other hand, drilling projects can be considered as one of the most critical types of projects in the petroleum industry. In this research, a novel risk based best-worst method (risk-BWM) is proposed for solving the issue of selecting the best contract strategy. A three level methodology was designed; firstly, the risk breakdown structure (RBS) of drilling projects was created in four levels including one heading in level 0, eight main areas of risk in level 1, 34 sub-areas of risk in level 2, and finally, 217 risk items in level 3. Secondly and on the basis of BWM, the weights of risk factors were determined as the selection criteria and consequently the best and the worst criteria were specified. Finally, using pair-wise comparisons between six types of drilling prevalent in contracts, the most appropriate contract type was proposed. The contribution of this study is the development of a generic RBS for drilling projects and application of the risk factors for the first time for the selection of contract type using the BWM method, which has the potential of being adapted for other types of underground projects.

Breakdown of Engineering Projects’ Success Criteria

“…The cross-check in the Scopus database suggested two main streams of the current success studies, and both indicated focusing and narrowing. The first stream is related to the particular type of engineering project, such as highway construction (Alleman and Tran 2021;Choi et al 2020), power sites (Abdel-Basset et al 2021), petroleum and petrochemical industry (Faraji et al 2021;Shariatfar et al 2019), space industry (Decadi 2021), waste treatment (Uren et al 2021), or IT (Hussain et al 2021). Significant research was conducted of highway construction projects, in which a link between contracting methods and criteria such as schedule, cost, and change orders was investigated (Choi et al 2020), as well as procurement method (Alleman and Tran 2021).…”

“…Significant research was conducted of highway construction projects, in which a link between contracting methods and criteria such as schedule, cost, and change orders was investigated (Choi et al 2020), as well as procurement method (Alleman and Tran 2021). The second stream leads to particular aspects of engineering project such as green building aspects and sustainability (Ahmad et al 2021), contracting (Faraji et al 2021), project team (Hussain et al 2021), and posthandover stage (Fahri et al 2020). No additional criteria were found in those studies which could not fit into those investigated previously in this study, and the findings mostly were coherent with the identified criteria in the breakdown suggested in this paper (Fig.…”

A Bid/Mark-Up Decision Support Model in Contractor’s Tender Strategy Development Phase Based on Project Complexity Measurement in the Downstream Sector of Petroleum Industry

“…One of the most crucial decisions regularly exercised by construction contractors is determining whether to bid on a certain project [13][14][15]. This decision is so complicated due to the complexity and uncertainty surrounding this determination, which is influenced by many factors [16,17]. The bidding process is highly complex and unsystematic, requiring numerous factors to be considered simultaneously [18], which have a high degree of complicated interrelations [19][20][21].…”

A conceptual framework of decentralized blockchain integrated system based on building information modeling to steering digital administration of disputes in the IPD contracts

“…For instance, in the planning stage, smart contracts, as well as construction activities, are labeled as the most important actions of incorporating BCT into the construction industry. The construction sector faced several discords, most of which are associated with contract, risk and responsibility and from the classification of project's governing bodies (Faraji et al, 2021a). There are obstacles to implement such concept in the construction industry due to other effective aspects such as financial, legal, technical and cultural issues.…”