Failure to develop the world's largest natural gas field: Lessons from endeavors in the South Pars mega projects

Reza Behboud, Azim Zarei, Adel Azar and Seyed Abbas Ebrahimi

Energy, 2023, vol. 272, issue C

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.

Keywords: Project failure; Cost overruns; Time overruns; Project management; Oil and gas industry (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:272:y:2023:i:c:s0360544223004851

DOI: 10.1016/j.energy.2023.127091

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