Benchmarking Relationship-Based Contracting and Performance Measurement of the Construction Industry into the Upstream Oil and Gas Industry - For Complex Procurements and Improvement

The upstream oil and gas industry suffers from inefficient performances in projects. On one hand, motivated by the facts that construction projects have achieved positive results by carrying out ongoing research on relationship-based contracting (partnering and alliancing) and implementing its performance measurement, this thesis aims to investigate the key elements (KEs) and key performance indicators (KPIs) of partnering and alliancing (P&A) that can be applied from construction projects to upstream O&G construction projects for benchmarking in order to handle complex procurements and improve efficiency of performances. The analysis of empirical data identifies that the KEs of P&A are (1) trust (2) effective communication (3) clear role and responsibility (4) cooperation and collaboration (5) mutual objectives and goals (6) risk and reward sharing mechanism (7) conflict and problem resolution and (8) continuous evaluation and improvement, and the KPIs of P&A are (1) health and safety (2) quality (3) trust and respect (4) effective communication (5) client s satisfaction (6) cost (7) time (8) schedule and (9) harmonious and cooperative working relationships. The similarities between the literature review and the findings indicate trust , effective communication , risk and reward sharing mechanism , cooperation and collaboration and continuous evaluation and improvement as defining features of KEs of P&A projects irrespective of industries. The notable differences illustrate that although both projects share common characteristics, certain elements of P&A can be difference in practices. The similarities in relation with the KPIs of P&A are found as health and safety , quality and additionally effective communication . On one hand, it is an interesting fact that client s satisfaction is identified in upstream O&G construction projects from the findings. Another remarkable difference is that harmonious and cooperative working relationships is appeared as the KPI of P&A, and moreover, trust and respect is ranked higher in upstream O&G construction projects compared to construction projects. The interview emphasizes the importance of carrying out a feasibility study and increasing understanding of P&A prior to its application. In addition, due to excessive competitiveness in most consortium projects, the win-win philosophy becomes buying-in . Also the leadership skills of a project director and manager and an establishment of a cooperative and collaborative culture are mentioned. Moreover, the power trip, egoism and opportunism behaviors are pointed out as the chronical problems in projects