Dynamics of Rework in Complex Offshore Hydrocarbon Projects

Abstract

Little systematic knowledge is available on the dynamics of rework in complex hydrocarbon (oil and gas) projects, despite the fact that they frequently exceed budget and schedule projections by more than 10%. To better understand pertinent issues associated with rework, twenty three in-depth interviews were undertaken with personnel from a major international oil and gas operator. The interviews sought to elicit deep individualistic knowledge about the dynamics of design changes, errors, and omissions that contributed to rework in four off-shore projects that they were involved with. Akin to previous research, the factors of poorly defined scope, unrealistic schedules, design changes, and coordination problems were identified as contributors to rework. A significant difference from previous studies, however, was that rework was expected and considered a norm. The issue at hand therefore related to ‘when and where’ rework would materialize, because it was considered that the implementation of front end loading, audits, and reviews would capture any design flaws that may have materialized. The potential revenue that could be generated from earlier extraction and production of oil and gas outweighed any rework costs that were likely to be incurred. A systemic model representing the underlying conditions that contributed to rework was developed from the findings to provide managers with the necessary insights about the interdependencies and behavior between key variables. The developed model can be used to identify future areas in which rework prevention and mitigation strategies should focus on in future projects.