Compelling outgrowth of engineering, procurement and construction contract in Malaysian oil and gas industry

Abstract

The oil and gas sector involved a plethora of professionals and processing requirements across the lifecycle of its product. In Engineering, Procurement and Construction (EPC) contract, the contractor has to deal with the owner and a large number of sub-entities. Due to that, many issues have arisen among the stakeholders in the EPC project and it leads to a delay in completion and budget overrun. A literature search indicated issues in the EPC contract that happened in other countries. However, there is a limitation of literature that highlights the issues of the EPC contract from the Malaysian context. This somehow hinders the effort to improve the issues of EPC contracting strategies in Malaysia. Hence, this research aims to identify the current critical issues facing by the Malaysian oil and gas industry. The research applies the qualitative paradigm through pilot semi-structured interviews with the actual practitioners. From the pilot interview conducted, the issues highlighted differs from both client and contractor’s thoughts. Contractors are concerned about project risk and project management issues while the client emphasized on the technical issues in the Engineering phase and procurement phase. This research offers a rich understanding in an unsaturated area of EPC contract from the Malaysian perspective and is expected to become the basis to support the future strategy in enhancing the effectiveness of EPC contracts in the Malaysian oil and gas industry.