Megaprojects, Complexity, and Investment Decisions

Abstract

The need for basic infrastructure for economic development in developing countries has made megaprojects popular, in such parts of the world. Megaprojects can be very important to a host country: the Nigeria Liquefied Natural Gas (NLNG) Project has contributed about four percent of Nigeria's Gross Domestic Product. However, due to the complexity involved with megaprojects, project failure rate is high around the world, especially so for upstream oil and gas projects. This paper recommends a systems approach to megaprojects analysis, for a better understanding of these projects: from the pre-final investment decision (FID) stage through project execution. This author believes that a system approach to megaprojects analysis should provide better decision quality for decision makers.