Collaboration dynamics in Capital Projects: an example from the Canadian Tar Sands industry
In the Canadian oil industry, many large scale projects, termed
Capital Projects, are undertaken to produce from oil sands.
However, megaprojects are notorious for their cost overruns
and schedule slippages. This study describes the key success
factors and challenges in megaproject collaboration through
an ethnographic approach. In total, 17 in-depth interviews with
project managers at seven major oil companies and contractors
were recorded. The results show that the main challenge
relates to the interaction between the oil companies and the
contractors. There is a general hesitation to introduce new,
innovative technologies.
In addition, external contingencies such
as the state of the economy, public acceptance, and specifically
for the Canadian oil sands, climatic conditions have a significant
impact on the collaboration dynamics. This strengthens the
argument that a change in the relationship between the oil
industry and contractors creates more effective megaprojects.
Partnership-types of collaboration with shared risks may
generate a more sustainable relationship resulting in more
robust, resilient, innovative and in particular, on-target projects.
Considering these factors, megaprojects can be realised with
more efficiency.
Methodology
This is an ethnographic study based on qualitative data. In total,
17 interviews were recorded at seven different international
operating organisations, each being either an oil company or
a contractor.
“For interpretivists, it is essential to see humans as actors
in the social world rather than as simply reacting as objects in
the natural world.” (O’Reilly, 2005). The actors in this research
are the interviewed project managers. To understand the critical
factors in megaproject collaboration, this methods allows
interpretation of the social world and the behavior, actions and
perceptions of the actors.
Collaboration in megaprojects
The collaborative setting is often mentioned as critical to a
project’s success (Cicmil and Hodgson 2006). In a megaproject,
many organisations are involved that obviously have their
differences.
Conclusions and recommendations
This research looked at the planning and execution of
megaprojects in the Canadian oil sands, with the following
conclusions:
- Industry party project concerns are relatively well captured by
project management tools.
- The main issues that surfaced in this research relate to the
interaction between the oil companies and the contractors.
Oil companies are eagerly trying to find a balance between
control on one side and contractor commitment on the
other side.
- To maximise the results, more innovative technologies
should be introduced during the execution of a megaproject.
However, since these projects span over multiple years, new
technologies are seen as a considerable risk factor.
- The main external contingencies are the state of the
economy, public acceptance and climatic conditions. These
impact the planning and execution of megaprojects, and
therefore influence the relationship between the oil company
and contractor.
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