Failure to develop the world's largest natural gas field: Lessons from endeavors in the South Pars mega projects. (1st June 2023)

• Record Type: Journal Article
• Authors: Behboud, Reza; Zarei, Azim; Azar, Adel; Ebrahimi, Seyed Abbas
• Is Part Of: Energy. Volume 272(2023)
• Publication Date: 2023-06-01
• Subjects: Project failure -- Cost overruns -- Time overruns -- Project management -- Oil and gas industry; Power resources -- Periodicals; Power (Mechanics) -- Periodicals; Energy consumption -- Periodicals; 333.7905
• DOI: 10.1016/j.energy.2023.127091
• Languages: English
• ISSNs: 0360-5442

Abstract

Abstract: Both time and cost overruns as the leading indicators of project failure are considered a severe problem in Iran's planned mega projects to develop the South Pars gas field (SPGF), which could be a reliable source to hold global energy security. This study investigates the root causes of failure in the SPGF development projects via a novel qualitative mixed methodology. Fifty-three causes of failure were identified based on an intensive literature review and semi-structured interviews with 16 project practitioners selected based on purposive sampling. Research primary data revealed that the average delays in carrying out the SPGF projects by international contractors were 16 months, while delays by Iranian contractors were over 65 months, which led to an estimated total lost sale of $278b during four periods of development. Analysis of narrative data showed that the most important SPGF failure causes in each period are poor technical knowledge and experience in carrying out mega projects and inattention to technological development, gross mismanagement and political interventions, lack of a master strategic plan for gaining the advantage of Iran nuclear deal in developing the SPGF projects, and extensive migration of qualified and experienced oil and gas experts due to the uncertainty over the country's future. Highlights: Iran's planned projects to develop South Pars faced severe time and cost overruns. The average project delays by international contractors were 16 months. Iranian contractors' delays in delivering projects were over 65 months. The total gas refiners' lost sales due to project delays are estimated at $278b Political and governmental related causes played a critical role in project failure.