Innovative Approach to Risk Analysis and Management of Oil and Gas Sector EPC Contracts from a Contractor’s Perspective

Engineering, Procurement and Construction (EPC) is an advanced contracting method in which a single party is responsible to complete all the components of the project and further commission it and handover to the client within a predefined cost and agreed timeline. Failure to which, EPC contractor has to pay heavy penalties. There are many risks for both the parties in this arrangement. Proper risk analysis and management is very important for this type of contract which dominates a project’s success or failure. In this research an effort has been made to identify, analyse and quantify rationally risks of oil and gas sector EPC projects. For this purpose a model has been proposed to assess and quantify risks involved in the process. Proper mitigation measures have also been proposed for all the critical risks to successfully complete a project from the contractor’s prospective in the oil and gas sector.