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Risk factors in oil and gas construction projects in developing countries: a case
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DOI: 10.1108/IJESM-11-2018-0002

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IJESM
13,4
846
Received 5 November 2018
Revised 13 December 2018
8 January 2019
28 January 2019
Accepted 28 January 2019
International Journal of Energy
Sector Management
Vol. 13 No. 4, 2019
pp. 846-861
© Emerald Publishing Limited
1750-6220
DOI 10.1108/IJESM-11-2018-0002
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1750-6220.htm
Risk factors in oil and gas
construction projects in
developing countries: a case study
Mukhtar A. Kassem
Faculty of Engineering and Built Environment Universiti Kebangsaan Malaysia,
Bangi Selangor, Malaysia, and
Muhamad Azry Khoiry and Noraini Hamzah
Smart and Sustainable Township Research Centre, Faculty of Engineering and
Built Environment Universiti Kebangsaan Malaysia, Bangi Selangor, Malaysia
Abstract
Purpose – This study aims to investigate the risk factors in construction projects in oil and gas processing
facilities in Yemen and serves as a case study for developing countries.
Design/methodology/approach – By using a questionnaire, data were collected from 201 project
managers and engineers employed in different sectors in the oil and gas industry in Yemen.
Findings – The survey analysis based on Kruskal–Wallis test method shows a high degree of agreement on
the perceptions of risk factors depending on categories of companies. In other words, the tested risk factors
exist in all sectors of oil companies in Yemen and are valid as a measure of risk factors in construction
projects in oil and gas organizations in general. Although no evidence suggests that the risk factors differ
significantly according to job title, the result of identifiable risk factors according to experience shows a
statistically significant difference among participants in terms of their experience. The relative importance of
the ranking of risk factors was obtained by the statistical analysis of responses on the impact and likelihood
of occurrence of these risks. Findings show that internal risks are the greatest influential factors in
construction projects in the oil and gas sector, followed by changes during construction project, government
instability, incorrect project cost estimation, government delay in decision making, incorrect project schedule
estimation, and political situation and war in the country.
Originality/value – These findings are valuable to organizations that are planning to conduct
construction projects for oil and gas processing facilities in Yemen and other nations with similar
environments, such as developing countries.
Keywords Construction projects, Developing countries, Project management, Questionnaire,
Oil and gas industry, Risk factors, Kruskal-Wallis test method, SPSS analysis
Paper type Case study
Introduction
Risk management in construction projects is essential to achieve the objectives of the projects
without any cost overrun or delay, and the achievement will be of high quality depending on
the design and planning of the project. The risk management system assists project managers
in prioritizing resource allocation and helps them obtain reliable decision-making, which
contributes to achieving the objectives and success of the project. Akintoye and MacLeod
(1997) defined risk for construction as a variable in the process of a construction project with
variation that results in uncertainty in the final cost, duration and quality of the project.
Construction project involves many relevant activities to reduce the gap between the
conceptual and execution stage, and the project team needs to experiment and overcome
numerous abnormalities and uncertainties. One of those challenges is identifying the Oil and gas
construction risk factors that are dominant in most, if not all, of the construction projects. construction
Adafin et al. (2018) reported that the proper risk analysis can offer a partial solution by
reducing the variance between design-stage elemental cost plans and final tender sums of
projects
the construction projects. Typically, the risk is identified as an event of uncertainty in which
the results fluctuate contrary to planned or expected, which leads to unexpected calamities
or losses. The main objective of this research is to determine the variance in construction
risk factors among different oil companies and the effect of the title job and years of 847
experience of respondents on identifying risk factors in construction projects for the oil
sector in Yemen. In other words, this study investigates that the variation among
oil companies in determining risk factors or risk under consideration represents all oil
companies in Yemen and the effect of the title job and experience of a project team working
on construction projects of oil and gas companies.

Risk factors in the oil and gas industries

Risk factors, which affect the main components of projects (e.g. cost, time and quality), are
common challenges in the construction industry worldwide. For example, Carr and Tah
(2001) classified critical risk factors into those related to the management of internal
resources and those prevalent in the external environment. Internal risk factors are
relatively more controllable than external risk factors and can be assessed as they vary
among projects. These risk factors include the level of resources available, experience in the
same type of work, the site location of the project and the conditions of the contract. External
risk factors are relatively uncontrollable by the project team, such as currency exchange
rate, inflation, fluctuations and force majeure accidents. Given the uncontrollable nature,
continual scanning and forecasting are needed to manage the effects of external forces.
However, this previous research fails to arrange risk factors according to their impact on the
success of the construction project.
Al-Fadhali et al. (2018) studied the influential factors in the construction industry in
Yemen. They found and classified the factors into four groups: consultant-, contractor-,
owner- and designer-related factors with 9, 9, 8 and 7 causes, respectively. Al-Fadhali et al.
(2017) also confirmed that in Yemen and other developing countries, many construction
projects experience extensive delays by exceeding the initial completion time of the project.
This situation leads to several reported effects, including cost overrun, litigation, arbitration,
failure and abandonment. Despite the importance of the research, these previous researchers
did not clarify the impact of the demographic factors of the workers in the construction
projects on the identification of affecting risk factors of the success of projects.
Baloi and Price (2003) explored the modeling of global affecting risk factors of
construction cost performance, comprehensively reviewed some studies on construction risk
factors and developed a collection of essential factors (e.g. risks related to labor skills
availability, material delivery and quality, equipment reliability and availability and
management efficiency). These previous researchers provided a general classification of the
risk group, which lists several sub-risks and enables the inclusion of new sub classifications
under important groups. This previous research is comprehensive but fails to accurately
define the priorities of those risks because of the subject of research in the redistribution of
parameters for the project of different parties.
Sultan (2004) argued that the most important factors of cost overrun in construction
projects in Yemen are imported materials, inflation rates, constant economic instability and
construction waste, followed by cost of labor, cost of local materials and availability of local
materials and standardization. The most critical factors are extreme political and
IJESM bureaucratic situation and difficulties in obtaining work permits because of the routine of
13,4 government work, followed by weakness of local conditions and infrastructure (e.g.
transportation, electricity, water, internet and lack of access roads and other services
necessary for the establishment of economic activity for various facilities).
Thuyet et al. (2007) conducted an in-depth study on the risks in the oil and gas
construction projects of the Vietnam oil and gas sector and interviewed and surveyed
848 companies working in this area. These previous researchers focused on two main objectives:
knowledge of the main affecting risks of oil and gas construction projects and development
of appropriate strategies to effectively mitigate critical risks using questionnaire survey.
They systematically examined the affecting risks of Vietnam’s oil and gas construction
projects. The degree of risk index developed, with the support of in-depth interviews, has
helped identify and mitigate key risks and responses. The top ten important risks are
obtained as follows:
(1) bureaucratic government system and lengthy project approval procedure;
(2) poor design;
(3) incompetence of project team;
(4) inadequate tendering;
(5) late internal approval process from the owner;
(6) inadequate project organization structure;
(7) improper project feasibility study;
(8) inefficient and poor performance of constructors;
(9) improper project planning and budgeting; and
(10) design changes.

This previous research is essential in the field of construction in the oil and gas sector, but it
fails to explain the differences among different oil companies and the impact of the job title
and experience of workers in identifying the risk factors.
Ruqaishi and Bashir (2013) investigated construction projects in the oil and gas industry
in the Gulf Cooperation Council Countries and found that the following seven major factors
are responsible for project delay:
(1) poor site management and supervision by contractors;
(2) problems with subcontractors;
(3) inadequate planning and scheduling of projects by contractors;
(4) inadequate management of schedules of contractors;
(5) delay in delivery of materials;
(6) lack of effective communication among project stakeholders; and
(7) weak interaction with vendors in the engineering and procurement stages.

These factors influence project schedule and time and are regarded as risks.
The problems of risk factors in construction projects have an important impact.
Thus, many studies have been conducted to investigate these problems in the
construction industry in several developing countries, such as in KSA: Alrashed et al.
(2014) and Assaf and Al-Hejji (2006); in Qatar: Emam et al. (2015), Kirat (2015) and
Jarkas and Haupt (2015); in UAE: Salama et al. (2008), El-Sayegh and Mansour (2015)
and El-Sayegh (2008); in Egypt: Khodeir and Mohamed (2015), Ibrahim et al. (2016) and
Aziz (2013); in Malaysia: Rahman et al. (2012), Memon et al. (2010), Alaghbari et al. Oil and gas
(2007) and Mohamed et al.(2015); in India: Thomas and Sudhakumar (2014), Doloi et al. construction
(2012) and Princy and Shanmugapriya (2017); in Jordan: Abbasi and Abdel-Jaber (2005)
and Al-Hazim et al. (2017); and in South East Queensland, Australia: Perez et al. (2017).
projects
The abovementioned studies develop a list of 51 risk factors, and these factors should
be further examined using questionnaire to assess their impact on the success of
construction projects in the oil and gas sector.
Most previous studies have focused on the definitions or ranking of risk factors but have
849
not explored demographic affecting factors (e.g. job title and experience) of the identification
of risk factors. The current study is the first to focus on the construction field in the oil and
gas sector in Yemen. The use of Kruskal–Wallis test as the current analysis method of
hypotheses in the construction management field is also novel.

Aims and development of research hypotheses

The objective is to identify the risk factors that influence on the construction project success
in oil and gas processing facilities in Yemen. This work serves as a case study for the oil and
gas sector in developing countries. In addition to sharing common borders, developing
countries have relatively similar political systems and share common risk factors according
to the previous literature review.
This work aims to provide answers to the following questions:

Q1. Do the risk factors in construction projects differ significantly according to oil and
gas organization type?
Q2. Do the risk factors in construction projects differ significantly according to job title
groups?
Q3. Do the risk factors in construction projects differ significantly according to project
team experience?
Q4. What is the classification of influencing risk factors in oil and gas construction
projects in Yemen?
To answer the first three research questions, the researchers developed three null
hypotheses as follows:

H1. No significant difference exists in identifying risk factors in construction projects

among oil companies.
H2. Experience of participants has no significant effect on identifying risk factors in
construction projects.
H3. The job title of participants has no significant effect on identifying risk factors in
construction projects.
To address the fourth research question, we applied the ranking method of risk factors by
using descriptive analysis.

Methodology
This section describes the methodology for investigating the risk factors in construction
projects in the oil and gas industry in Yemen, particularly the process of collecting data,
analysis techniques and tools.
IJESM To answer the research questions and confirm the hypotheses, a questionnaire with
13,4 closed type questions was conducted. To ensure clarity and completeness of the
questionnaire and the applicability of the listed risks (identified using the literature review)
to the oil and gas construction projects in Yemen as a case study, a pilot study that included
30 participants (i.e. project managers and construction engineers) from 11 different oilfield
sectors in Yemen was conducted. The responses received from participants were used as a
850 guide for refining and redesigning the final questionnaire.
On the basis of the literature review, expert judgment by four project managers in the oil
sector in Yemen, the researchers’ 15 years of experience in construction projects in the oil
and gas sector in Yemen and the sources of risks, the risk factors were classified into 13
main groups as follows:
(1) client-related;
(2) contractor-related;
(3) consultant-related;
(4) feasibility study and design-related;
(5) tendering and contract-related;
(6) resource and material supply-related;
(7) project management-related;
(8) country economic-related;
(9) political risk-related;
(10) local people-related;
(11) safety and environment-related;
(12) security risk-related; and
(13) force majeure-related.

The first portion was an introduction to the questionnaire, objectives and conclusion about the
questionnaire, and the second portion comprised questions regarding the respondents, work
experience and company profile, including the job title of employees. The next four portions
were designed to address the internal and external risk factors (i.e. probability and impact).
Respondents were requested to indicate the level of importance of 51 possible risk factors using
a five-point Likert scale (1 = very low, 2 = low, 3 = moderate, 4 = high and 5 = very high).
Sample size selection is an essential step in the data collection process, and an effective way
to ensure the generality of results is to use a sufficiently large sample representative for the
community. However, the total number of the population under study as per the ministry of oil
in Yemen reports is equal to 4,812 employees in 11 oil companies and 1 gas company.
Accordingly, the sample size can be calculated as shown in Equation (1) using Cochran (1963):
n0 385
n ¼ ðn0 1Þ
¼ ¼ 357 (1)
1þ N 1 þ ð3851
4812
Þ

Thus, the sample size of the study was set to 357 employees. Sample targeted in the
questionnaire was the construction project team in oil companies, such as project managers,
supervisors, engineers and staff with relationship to the projects (e.g. safety, environmental
and material supply staff). Table I shows the demographic analysis of participants.
Through verification using Krejcie and Morgan’s (1970) equation, we obtained the same
number of sample size, that is, 357 employees. This issue has always been a problem in this
type of research. For example, the sample sizes in Ruqaishi and Bashir (2013), Thuyet et al. Oil and gas
(2007), Jergeas and Ruwanpura (2010) and Fallahnejad (2013) are 59, 42, 87 and 23, construction
respectively. Thus, the current sample size was comparable to those reported in earlier
relevant studies.
projects
The study adopted a risk criticality (RC) index to evaluate the criticality of each risk. RC
is a function of the likelihood of occurrence (LO) and the magnitude of impact (MI) of each
risk (Zou et al., 2007; Hwang et al., 2015).
RC can be calculated using the following equation: 851
qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
RCji ¼ LOij  MIji (2)

where LOij = LO of risk i by respondent j, MIij= MI of risk i by respondent j, n = number of

respondents, RCij = RC of risk i by respondent j and RCi = RC of risk i. Each respondent’s RC
data were input into the SPSS software for analysis.
The collected data would be analyzed using three nonparametric statistical tools:
descriptive analysis, reliability test and Kruskal–Wallis test.
Descriptive analysis of frequencies (mean), correlation among variables (risk factors) and
Kaiser–Meyer–Olkin (KMO) measurement of sampling adequacy were conducted. KMO
measures the sampling adequacy, which should be higher than 0.5 to obtain a satisfactory
factor analysis (Hair et al., 2010). The levels of KMO value are interpreted as marvelous
(0.90), meritorious (0.80), middling (0.70), mediocre (0.60), miserable (0.50) and unacceptable

Demographic characteristic Frequency (%)

Age
Less than 30 5 0.02
30-40 80 0.40
41-50 91 0.45
51 and above 25 0.12
Experience in construction industry
Less than five years 23 0.11
5-10 years 49 0.24
10-20 years 69 0.34
20-30 years 44 0.22
More than 30 years 16 0.08
Job title
Construction manager 25 0.12
Project manager 28 0.14
Project coordinator 16 0.08
Site engineer 73 0.36
Site supervisor 37 0.18
Others 22 0.11
Oil company work for
Petro masila Sector 38 0.19
Safer sector 29 0.14
YLNG sector 46 0.23 Table I.
Total sector 27 0.13 Demographic
OMV sector 32 0.16 characteristics
Other sectors 29 0.14 analysis
IJESM (below 0.50) (Kaiser, 1974). Bartlett’s test of sphericity determines if the correlation matrix is
13,4 an identity matrix, which can indicate whether variables are unrelated and therefore
unsuitable for structure detection. Small values (less than 0.05) of the significance level
indicate that a factor analysis may be useful with the data if an identity matrix exists;
otherwise, factor analysis is meaningless (Field, 2013; George and Mallery, 2016). Reliability
test is usually used to examine whether variables are reliable. The result of Cronbach’s
852 alpha for all variables should be more than 0.7 to be accepted. The reliability of the survey
variables in this study was tested using Cronbach’s alpha, a coefficient of reliability as
shown in Equation (3):
Pk !
j¼1 s Uj
2
k
a¼ 1 (3)
1k s 2X

where k is the number of questions, s 2Uj is the variance in scores on each question and s 2X
is the total variance in overall scores.
Kruskal–Wallis test is appropriate for analyzing Likert five-point scale responses and
situations in which the normality of the assumption is unjustified (Montgomery, 2005). A
Kruskal–Wallis test was conducted in this study to determine whether the mean
significance of each factor was equal across the public, private consultants and contractors
using the SPSS software. This test statistic has a special distribution known as the chi-
square distribution. For this distribution, the degree of freedom has only one value, which is
one less than the numbers of groups as shown in Equation (4):

12 Xm
KW ¼ ni Ri 2  3 ð N þ 1Þ (4)
N ð N þ 1Þ i¼1

where Ri is the sum of the ranks for each group, N is the total sample size and ni is the
sample size of groups 1, 2, 3 and 4.

Data analysis and result

The completed responses were collected either personally or received through regular e-
mails and faxes. Out of 360 distributed questionnaires, 201 questionnaires were complete
and used in the analysis. Table I summarizes the profile of respondents.
The demographic characteristic can explain the importance of this survey. A total of 34
per cent of respondents have work experience between 10 and 20 years, 22 per cent of them
have work experience of 20-30 years and are considered experts and 8 per cent of them have
more than 30 years of experience. The job title category can provide a good idea on the
relationship of the answer to the subject of the survey. A total of 26 per cent of participants
are managers and 36 per cent of them are engineers and deal directly with risk management
of the projects. This survey covered all oil field companies in Yemen and concentrated on the
vital five sectors as shown in the demographic table above.
The respondents to the questionnaire belong to most oil sectors working in Yemen and
have different job titles and years of experience. Accordingly, the results of the analysis
have scientific value and make the questionnaire valid, comprehensive and fit to be a model
for similar studies in developing countries. The demographic analysis in the study is the
backbone. The objective of the study is to examine the effect of diverse companies and job
title and experience of participants on identifying risk factors in construction projects in the
oil sector and the degree of difference among these participants within one category or Oil and gas
between different groups under study. construction
Table II shows the mean of each risk factor and the ranking of significant factors
according to mean analysis.
projects
Ranking of risk factors using the mean of response is the first indicator of the direction of
participants in identifying such factors and the relative importance of the impact and
probability of risks in construction projects for oil in Yemen. Changes during construction
project, government instability, incorrect project cost estimation, government delay in decision 853
making and incorrect project time schedule estimation are the top five factors in ranking with
means of 3.7886, 3.7847, 3.7412, 3.7118 and 3.7087, respectively. Most of the participants believe
these internal risk factors have high impact and likelihood in the construction projects.
Political instability and war in the country, which are assumed as external factors, rank
six and seven on the basis of mean analysis for risk factors. These results are similar to
those by Jannadi and Almishari (2003), Assaf and Al-Hejji (2006), Thuyet et al. (2007), Jarkas
and Haupt (2015) and Ahmed and Othman (2013). Table II shows that only two risk factors
have means below 3.00, which indicates weak effect.
KMO test was used to measure the sampling adequacy of data, whereas Bartlett’s test
was used to determine the relationships among variables included in the analysis.
Table III shows that the KMO value of the collected data for risk factors is 0.955 > 0.6
(minimum accepted value). The calculated value of Sig. (significant probability) using
Bartlett’s test is 0.000, which is less than the significance level of 0.01. As a result, the
collected data are confirmed to be relevant and suitable for the subsequent analysis.
The questionnaire reliability was tested using Cronbach’s alpha. The computed
coefficient value is 0.983, which is considered acceptable because it exceeds the minimum
acceptable value of 0.7 (Nunnally and Bernstein, 1994).

Hypothesis testing
The primary data collected from the questionnaire were analyzed from the perspective of oil
company and experience and job title of a project team using the Kruskal–Wallis test to test
the three hypotheses.
Table IV and Figure 1 show the results of the analysis of the identification of risk factors
in the construction projects by categories, the method of distribution and the difference
between one and different categories.
The Kruskal–Wallis test conducted for testing the hypotheses shows that the affecting
risk factors of construction projects are not perceived significantly different by the oil
company (different oil sector categories were tested in the survey, as shown in Table I).
Regarding (H1), Table IV and Figure 2 show that the Kruskal–Wallis test suggests a
significant difference at the level of 0.01. Specifically, significant differences in perception
are observed only for 17 out of 51 risk factors. Therefore, the different oil companies in
Yemen have relative agreement on the affecting risk factors of construction project success.
To explore whether risk factors differed according to the experience of the project team
(H2), the Kruskal–Wallis test was conducted. Table IV and Figure 2 shows a significant
difference at the level of 0.01, which suggests that the risk factors differ with the variation in the
experience of participants. In particular, significant differences in perception are found for 32
out of 51 risk factors. Therefore, relative difference exists among the different years of
experience of the project team in Yemen in terms of the affecting risk factors of construction
project success. In other words, the assessment and identification of risk factors in the
construction projects vary with the difference in the years of experience in this sector because
most factors can be determined by accumulating the experience of many years of work in these
IJESM Risk factors Mean Risk factors ranking
13,4
Government delay in decision-making 3.7118 4
Unstable of government 3.7847 2
Government interference in projects 3.2303 37
Oil company interventions 3.3629 25
Changes during construction process 3.7886 1
854 Delay payment of contractor’s dues 3.0974 46
Lack of contractors experience 3.6533 9
Execution errors 3.3525 26
Inadequate coordination among contractors 3.3149 31
Insufficient consultant’s experience 3.4118 17
Delays review and approval of design 2.9709 51
Poor contract management 3.366 24
Improper project feasibility study 3.5376 11
Lack of data accuracy and survey information 3.2114 39
Frequent change of designs 3.452 16
Wrong project cost estimation 3.7412 3
Wrong project time schedule estimation. 3.7087 5
Inadequate tendering 2.9783 50
Lack of detailed items 3.1458 44
The terms of the contract are unclear 3.6607 8
Corruption accompanying tenders 3.41 18
Shortage and low productivity of labors 3.5557 10
Delay in delivery of materials to site 3.3271 29
The fluctuations in the material’s cost 3.2211 38
Poor quality of construction materials 3.3675 23
Shortage of modern equipment 3.2034 40
Inappropriate organizational structure 3.326 30
Ineffective management 3.3401 28
Poor planning and controlling for scheduling, and budgeting 3.3901 20
Lack of effective communication and coordination 3.1954 41
lack of adequate quality control management 3.2593 35
Economic and financial crisis 3.5352 12
Foreign currency fluctuation 3.3517 27
Higher insurance and transport prices to Yemen 3.2881 33
Lack of infrastructure projects 3.491 14
Political instability 3.6772 6
Change regulations and law 3.172 43
Country conditions during construction 3.3885 21
Illegal support and nepotism 3.2466 36
Responsibility toward society 3.1726 42
Recruitment of local peoples 3.4601 15
Different language and culture with the local community 3.0005 49
Environmental protection pressure of their groups 3.2831 34
Health and safety 3.4032 19
Waste treatment 3.0212 47
Length of oil sector border 3.3014 32
The threat of armed groups 3.3836 22
Unsafe transportation routes 3.5022 13
Table II. Inclement weather, flood, fire and landslip 3.0166 48
Risk factor ranking Unforeseen circumstances 3.1181 45
using mean analysis The war in country 3.6738 7
projects to determine the frequency of the occurrence of the risk and the extent of its impact on Oil and gas
the success of the project. construction
Another test was conducted to determine whether the risk factors were perceived
significantly different depending on job title categories (H3). As shown in Table IV and
projects
Figure 2, no association between identify risk factors of the construction project and job title
of participants is found at the significance level of 0.01. Significant differences in perception
exist only for 11 out of 51 risk factors. Therefore, the employees of different job titles in 855
Yemen have relative agreement regarding the affecting risk factors of construction project
success.
The results of the statistical analysis indicate no statistically significant differences
among respondents surveyed by company categories and job title. In contrast, significant
statistical differences are found among respondents depending on the experience in
construction projects. The identified risk factors need a check for the history of such projects
in previous years and investigation for the prerecorded learning lessons through the
experience of those working in these projects. Therefore, experience in work is essential to
identify risk factors.

Conclusion
The oil and gas industry and its projects are closely related to the country’s economy and
one of the public budget income resources in developing countries, such as Yemen. Oil and
gas projects are also assumed as mega projects in the infrastructure of any oil country.
Therefore, studying the affecting risk factors of the success of projects is important.
Ranking of risk factors by impact and frequency in projects helps the project team and
management to plan for appropriate responses to these risks according to the priority of
occurrence and the importance of impact. This study provided a specific ranking of risk
factors through a statistical analysis using participant responses to the questionnaire.
The literature review in this study revealed that although considerable research has been
conducted to investigate the affecting risk factors in the construction industry worldwide,
only a few studies have focused on these risk factors in oil and gas construction projects.
Furthermore, no study has investigated this issue in Yemen. The current research aimed to
study the change in the assessment of risk factors in the construction projects by the
participants in the questionnaire according to three categories. The results showed no
statistically significant differences among participants according to the oil companies they
are working and their job title. On the contrary, statistically significant differences were
found in the classification of risk factors depending on the experience of the project team
involved in the survey. A significant statistical difference existed among respondents
depending on their experience in construction projects. This deduction is consistent with
reality. Therefore, the input data are relevant and suitable for analysis. Companies should
depend on workers who have high experience when assessing the risks.

KMO and Bartlett’s test

KMO measure of sampling adequacy

Bartlett’s test of sphericity 0.955
Approximately chi-square 10,510.350 Table III.
df 1,275 KMO and Bartlett’s
Sig. 0.000 test
IJESM p-values of the Kruskal–Wallis tests
13,4 Risk factors Asymp. Sig. Asymp. Sig. Asymp. Sig.
groups Risk factors (oil company) (experience) (job title)

Client-related risk Government delay in 0.155 0 0.172

factors decision-making
Unstable of government 0.377 0.013 0.112
856 Government interference in 0.552 0.144 0.189
projects
Oil company interventions 0.195 0.001 0.041
Changes during construction 0.001 0 0.102
process
Delay payment of contractor’s 0.774 0.14 0.432
dues
Contractor- Lack of contractors 0.608 0.038 0.038
related risk experience
factors
Execution errors 0.013 0.012 0.393
Inadequate coordination 0.24 0 0.167
among contractors
Consultant- Insufficient consultant’s 0.421 0 0.021
related risk experience
factors
Delays review and approval 0.5 0 0.032
of design
Poor contract management 0.013 0 0.001
Feasibility study Improper project feasibility 0.001 0 0.001
and design- study
related risk
factors
Lack of data accuracy and 0.291 0 0.026
survey information
Frequent change of designs 0.006 0 0
Wrong project cost estimation 0.009 0 0.007
Wrong project time schedule 0.002 0 0.031
estimation
Tendering and Inadequate tendering 0.221 0 0.038
contract-related
risk factors
Lack of detailed items 0.193 0.034 0.524
The terms of the contract are 0.016 0 0.049
unclear
Corruption accompanying 0.394 0.019 0.254
tenders
Resources and Shortage and low 0.156 0 0.001
material supply- productivity of labors
risk factors
Delay in delivery of materials 0.988 0.548 0.765
to site
Fluctuations in the material’s 0.42 0.088 0.161
Table IV.
cost
Risk factors Poor quality of construction 0.093 0.001 0.05
comparison by oil materials
company, experience Shortage of modern 0.076 0 0.003
and job title of the equipment’s
project team (continued)
 Oil and gas
p-values of the Kruskal–Wallis tests construction
Risk factors Asymp. Sig. Asymp. Sig. Asymp. Sig.
groups Risk factors (oil company) (experience) (job title) projects
Project Inappropriate organizational 0.137 0 0.003
management- structure
related risk
factors 857
Ineffective management 0 0.001 0.014
Poor planning and controlling 0.004 0.001 0.136
for scheduling, and budgeting
Lack of effective 0.007 0.192 0.078
communication and
coordination
Lack of effective quality 0.06 0.013 0.084
control management
Country Economic and financial crisis 0.02 0.001 0.105
economic-related
risk factors
Foreign currency fluctuation 0.001 0.003 0.394
Higher insurance and 0.003 0.304 0.47
transport prices to Yemen
Lack of infrastructure 0 0 0.01
projects
Political risk- Political instability 0.011 0 0.089
related risk
factors
Change regulations and law 0.181 0.049 0.559
Country conditions during 0.084 0 0.191
construction.
Illegal support and nepotism 0.088 0.548 0.589
Local peoples- Responsibility toward society 0.077 0.023 0.123
related risk
factors
Recruitment of local peoples 0.002 0.001 0.004
Different language and 0.292 0 0.005
culture with the local
community
Safety and Environmental protection 0.025 0 0.316
environmental- pressure of their groups
related risk
factors
Health and safety 0.003 0 0.001
Waste treatment 0.01 0.017 0.229
Security risk Length of oil sector border 0.001 0 0
-related risk
factors
The threat of armed groups 0.001 0.009 0.03
Unsafe transportation routes 0.002 0.106 0.367
Force majeure- Inclement weather, flood, fire 0.013 0.001 0.078
related risk and landslip
factors
Unforeseen circumstances 0.032 0.662 0.415
War in country 0 0.019 0.097

Note: Asymp. and Sig.: IS (Asymptotic Significance) Table IV.

 p-values of the Kruskal-Wallis tests
IJESM
13,4 1.2

0.8

858
0.6

0.4

0.2

Figure 1. 0

p-values of the CL1 CL3 CL5 CO1 CO3 CN2 FD1 FD3 FD5 TC2 TC4 RM2 RM4 MR1 MR3 MR5 EC2 EC4 PO2 PO4 LP2 EN1 EN3 SE2 FM1 FM3

Kruskal–Wallis tests Asymp. Sig. (Oil Company) Asymp. Sig.(Experience) Asymp. Sig. (Job tle)

Although the research was conducted to identify the significant risk factors in
construction projects for oil and gas processing facilities in Yemen, the results can be
applied to construction projects implemented in any of developing countries. The
sample size used in the study is more favorable than those in earlier studies in the same
field.
The success of construction projects in general and oil and gas projects in particular lies
in identifying and defining the affecting risk factors of the project. Accordingly, appropriate
plans and strategies can be developed to respond and avoid any possible effects of risks to
the cost, schedule and quality of the project. This research is useful and can help researchers
and companies working in the oil and gas sector. The obtained ranking of risk factors can
also help the project team and management to plan for appropriate responses to these risks
according to the priority of occurrence and the importance of impact.

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Operations. Enterprise Risk Management in International Construction Operations, Springer, 861
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Corresponding author
Mukhtar A. Kassem can be contacted at: mukhtarkas@gmail.com

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