Regional energy projects facing significant challenges: report
Booz & Company has said the Middle East and North Africa (MENA) energy industry is expected to continue the massive investment programme during the coming decade by implementing projects worth some $1.1trn across the energy value chain.
Major resource holders such as Saudi Arabia, the UAE, Iraq, and Iran are expected to lead the way in spending, said the global management consulting firm.
“However, the next wave of capital projects will be larger and more complex, and will represent a significant capital outlay that needs to be carefully managed,” the report said.
Cost overruns, schedule slippages, and inconsistent quality have become recurring concerns for senior management, some of which come from market-related issues, such as a surge in commodity prices in the middle of the last decade”, said Raed Kombargi, partner with Booz & Company.
However, “many of these problems arise from within the industry itself,” he said. “In our experience, the root causes include inadequate engineering and project management (E&PM) strategies, a lack of clear governance, inadequate checks and balances, insufficient standardization, and a shortage of local capabilities.”
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Grand operations meet grand challenges in any section of labor. I think the industrial sector faces more significant challenges than most because of the amount of regulations that are inherent within the industry. The greater challenges there are to overcome, the greater the impact and significant strides can occur within our industry, and we should be proud of that.