Construction delays and their effects on the oil and gas industry's performance and profitability in the UAE

Abstract

The purpose of this study is to investigate causes and effects of construction delays in the oil gas construction industry in the United Arab Emirates (UAE). Research performed previously evaluating the oil and gas industry in Oman was evaluated, and a full literature view of previous related research was performed. Thirty one causes of delays identified from previous research were gathered in a survey and distributed to twenty four participants working within the oil and gas industry throughout the UAE. The survey was designed so that causes of delays are ranked on a Likert scale based on their level of importance. Eleven out of twenty four surveys were collected with a response rate of 46%. Through the survey, the causes of delay were ranked and results were investigated to evaluate whether each individual construction stage's delays contribute to overall project delays. The investigation was performed through a statistical analysis evaluating the hypothesis, which questions whether individual construction stage delays contribute to the overall project delays. The ranking revealed that most of the delays occur at the design & tendering, and pre-construction stages of construction. The statistical analysis on the other hand revealed that at the 95th percentile level of confidence the hypothesis was statistically significant, but insignificant at the 99th percentile. Therefore, the null hypothesis was rejected at the 0.05 significance level, and failed to be rejected at the 0.01 significance level. The design & tendering stage was then identified as the stage that most contributes to overall project delays. This research may be useful to professionals in the oil and gas construction industry in the UAE or in the GCC, interested in acquiring an insight on what is considered as major causes and effects hindering the efficiency and profitability of oil and gas construction projects in the region.