Cost Overruns in Hydrocarbon Megaprojects: A Critical Review and Implications for Research

Article

Olaniran, Olugbenga Jide, Love, Peter E. D, Edwards, David, Olatunji, Oluwole Alfred and Matthews, Jane. 2015. "Cost Overruns in Hydrocarbon Megaprojects: A Critical Review and Implications for Research." Project Management Journal. 46 (6), pp. 126-138. https://doi.org/10.1002/pmj.21556
Article Title

Cost Overruns in Hydrocarbon Megaprojects: A Critical Review and Implications for Research

ERA Journal ID19374
Article CategoryArticle
AuthorsOlaniran, Olugbenga Jide (Author), Love, Peter E. D (Author), Edwards, David (Author), Olatunji, Oluwole Alfred (Author) and Matthews, Jane (Author)
Journal TitleProject Management Journal
Journal Citation46 (6), pp. 126-138
Number of Pages13
Year2015
Place of PublicationUnited States
ISSN1938-9507
8756-9728
Digital Object Identifier (DOI)https://doi.org/10.1002/pmj.21556
Web Address (URL)https://journals.sagepub.com/doi/10.1002/pmj.21556
Abstract

Cost overruns are prevalent in hydrocarbon (oil and gas) megaprojects. A recent report indicates that 64% of ongoing megaprojects globally are facing cost overruns. Despite their increasing occurrence, there has been limited published research in the mainstream literature that has specifically examined why and how they occur. Consequently, suggestions regarding how to constructively address cost overruns in hydrocarbon megaprojects are scant. To better understand the causal nature of cost overruns in hydrocarbon megaprojects, this article provides a critical review of the extant literature. Findings from the research indicate that complex interactions between project characteristics, people, technology, and structure and culture contribute to cost overruns occurring. As a result, it is suggested that chaos theory can be used to explain how cost overruns arise in hydrocarbon megaprojects. This article provides a reference point for engendering future research in this pervasive and fertile area.

Keywordscost overrun; hydrocarbon; learning; megaprojects; research
ANZSRC Field of Research 2020330299. Building not elsewhere classified
330207. Quantity surveying
330203. Building industry studies
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Byline AffiliationsCurtin University
Birmingham City University, United Kingdom
Institution of OriginUniversity of Southern Queensland
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