Communication of risk in oil and gas megaprojects: A case study of the Ivar Aasen development project
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Risk management practices in the oil and gas industry has gained increased attention in the recent years. Achieving efficient and effective project management is essential for the project organization, to increase the level of project success. In this context, management of risk is an important part. The case company for this thesis is Det norske oljeselskap ASA, and its development project Ivar Aasen a project which is estimated to have a total investment cost of NOK 24.7 billion was conducted. The QA/risk manager at Ivar Aasen provided a problem context in advance of the thesis; in short it stated that the project organization struggled with communicating the total risk picture throughout the organization. Thus, the purpose of this study was to investigate how inter- and intra team dynamics affects risk communication in the oil and gas megaprojects. Both inter- and intra team dynamics are an integral part of organizational functioning. When associated with risk communication, the team dynamics are expected to influence the quality of the risk communication within the project organization. A conceptual model based on best practice from existing theory was developed as a result of a literary study. This model can help participant of megaprojects develop a holistic view of aspects affecting risk communication, and constitutes ten coordinating mechanisms. It has been distinguished between mechanisms on inter-and intra- team level. The inter-team mechanisms (strategic level) are: Collaboration and coordination across interfaces, adaption of risk management framework, leadership, team structures, and ICT. On intra-team level (team level) the mechanisms are identified as: team maturity, trust, informal communication, adaptability, and shared mental models. Furthermore, the conceptual model can be used as a framework for benchmarking analyses on risk communication practices in megaprojects.In order to evaluate the inter- and intra-team dynamics the SPGR-framework was applied. The study covers teams from four different projects and sub-projects at Ivar Aasen, representing four different risk communication scenarios. The SPGR-data was supplied with qualitative data, such as; document and archival data, as well as in-depth interviews with key personnel from the case company. Results from the empirical study showed that there are several challenges and areas for improvement when regarding risk communication in Ivar Aasen. These findings entails; a need for better commitment and top-down management in the project management team; better cross-functional communication about risk make people assess project risks when making decisions; develop adaptability in order to utilize the vast experience of project members; and better tailoring of the risk management framework to the context of the Ivar Aasen. The SPGR results indicated that there is not an optimal level of purpose in the organization; the teams in the organization should have a level of purpose characterized as innovation, but are currently on a level resembled as a mix between team spirit and production.Findings indicated a gap between the identified mechanisms in the conceptual model and the risk communication process. We have deducted that due to the complex environment of the megaproject, the level of purpose in the Ivar Aasen development project should reach a higher level. The complexity is caused by virtual team structures, diversity in the workforce, many intricate interfaces (both external and internal), and the sheer number of resources. By developing the coordinating mechanisms from the conceptual model, inter -and intra team dynamics at Ivar Aasen can indeed be improved. Conclusively, improved coordinating mechanism equals improved team dynamics, which equal an improved risk communication process. In order to achieve a higher degree of purposefulness within the teams, and consequently create higher trust and more aligned mental models, team training should be initiated. It has to be pointed out that it does not matter how good the systems and processes for risk communication are if the people of the organization is unwilling to utilize them. The state of mind of project members has to be wired to see risk management and risk communication as a necessary benefit and not as an unnecessary evil.