What happens when project designs change midway through execution in the oil and gas industry? How do these changes impact Project Performance in Oil and Gas, and what factors contribute to these disruptions? In an industry where precision and timing are critical, understanding the relationship between Project Design Changes in Oil and Gas and project outcomes is essential for success.

This article explores the relationship between project design change contributing factors and Project Management in the Oil and Gas Industry. It draws from the research titled “The Relationship between Project Design Change Contributing Factors and Project Performance in Oil & Gas Industry in Egypt,” conducted by Khaled Ali Elsherbiny Ibrahim, DBA, a graduate of  “IBAS” International Business School of Switzerland, highlighting how pre-project planning, project progress, and schedule compression impact project outcomes and energy sector development in Egypt.

Understanding Project Design Changes in Oil and Gas

Project Design Changes in Oil and Gas are inevitable due to the complexity and scale of projects in this industry. These changes can arise from various factors, including technological advancements, regulatory requirements, and unforeseen site conditions.

Key aspects of design changes include:

• Causes: Changes in project scope, stakeholder requirements, or external factors.
• Impacts: Effects on project cost, schedule, and overall performance.
• Management: Strategies to mitigate risks and ensure smooth implementation.

As Khaled Ali Elsherbiny Ibrahim explains, “Design changes topic had been investigated in this research and also the major causes, contributing factors, and impacts of this kind of change in oil and gas projects” (Khaled, 2024).

Factors Contributing to Design Changes

The research identifies three main factors that contribute to Project Design Changes in Oil and Gas:

1. Pre-Project Planning Efforts: The level of planning and preparation before project execution.
2. Project Percent Complete (PPC): The stage of project completion when changes occur.
3. Level of Schedule Compression: The extent to which project timelines are shortened.

These factors play a critical role in determining the impact of design changes on Project Performance in Oil and Gas.

According to Khaled Ali Elsherbiny Ibrahim, “The research also explored the main factors influencing design changes in oil and gas projects based on the existing literature and current industry knowledge on the subject” (Khaled, 2024).

Impact of Design Changes on Project Performance

Design changes can significantly impact Project Performance in Oil and Gas, particularly in terms of cost and schedule. The research highlights the following findings:

• Pre-Project Planning Efforts: While no direct correlation was found, better planning may indirectly reduce design change costs through improved communication and risk management.
• Project Percent Complete (PPC): As projects progress, the cost and duration of design changes tend to increase.
• Level of Schedule Compression: This factor showed no significant impact on design change costs or schedule extensions.

As Khaled Ali Elsherbiny Ibrahim notes, “Project Percent Complete (PPC) has a moderate positive statistically significant effect on Design Change Cost and also has weak to moderate positive relationship with the Schedule duration extension due to design changes” (Khaled, 2024).

Challenges in Oil and Gas Project Management

The oil and gas industry faces unique Challenges in Oil and Gas Project Management, including:

• Unpredictable Conditions: Changes in site conditions or regulatory requirements.
• High Costs: The financial impact of design changes and delays.
• Stakeholder Coordination: Managing the expectations and requirements of multiple stakeholders.

Effective Project Risk Management in Oil and Gas is essential to address these challenges and ensure project success.

According to Khaled Ali Elsherbiny Ibrahim, “The current research findings have significant participations in both academia and industry because it handles the subject of evaluating the cost and schedule effects of design changes in oil and gas projects” (Khaled, 2024).

Recommendations for Improving Project Performance

Based on the research findings, the following recommendations are proposed to enhance Project Performance in Oil and Gas:

1. Enhance Pre-Project Planning: Invest in thorough planning to anticipate and mitigate potential design changes.
2. Monitor Project Progress: Regularly assess the Project Percent Complete (PPC) to identify and address changes early.
3. Improve Risk Management: Develop robust strategies for Project Risk Management in Oil and Gas to minimize disruptions.
4. Leverage Technology: Use advanced tools and systems to manage design changes and track project performance.

As Khaled Ali Elsherbiny Ibrahim concludes, “Oil and gas industry organizations should evaluate the design change impacts correctly through a well-managed systems and representative parameters that could give the right indication and help in the decision-making process” (Khaled, 2024).

Leveraging Technology in Project Management

Technology plays a vital role in modern Project Management in Oil and Gas Industry. Advanced tools and systems can streamline processes, improve communication, and provide real-time data for better decision-making.

Key technologies include:

• Project Management Software: Tools for planning, scheduling, and tracking project progress.
• Data Analytics: Analyzing project data to identify trends and make informed decisions.
• Collaboration Platforms: Facilitating communication and coordination among project teams.

According to Khaled Ali Elsherbiny Ibrahim, “Oil and gas industry organizations should evaluate the design change impacts correctly through a well-managed systems and representative parameters that could give the right indication and help in the decision-making process” (Khaled, 2024).

Conclusion

The critical relationship between Project Design Change Contributing Factors and Project Performance in Oil and Gas cannot be overstated. By understanding the factors that contribute to design changes and their impact on cost and schedule, organizations can develop strategies to improve project outcomes. As the oil and gas industry continues to evolve, the ability to manage design changes effectively will remain a key determinant of success.

For professionals aiming to excel in Project Management, pursuing an MBA or DBA in this field is a strategic decision. These programs provide the essential knowledge, analytical skills, and leadership expertise needed to plan, execute, and deliver projects successfully. By mastering the principles of Project Management, you can drive efficiency, manage risks, and achieve organizational goals effectively.

Join IBAS-VERN to gain access to world-class resources, elevate your career, and prepare yourself for leadership roles in the dynamic world of Project Management.

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