The selection of contract strategies using the analytic network process for oil and gas projects: a case study

Abstract

The key objective of this study was to select Oil & Gas projects contract strategies. The ANP method was used in order to achieve this objective. The candidate strategies had multiple, interrelated consequences and generated a series of impacts (technical, commercial and environmental). The study carried out by using the ANP added significant value to the company by making the evaluation and selection processes more transparent and efficient as well as by reducing environmental impacts and optimizing the use of natural resources. A working group was formed to analyze the possible contract strategies for a particularly complex project and an ex post facto analysis was performed. The case study was therefore developed in a setting of investment review by the working group including professionals from different subareas. Those professionals were responsible for recommending the most adequate contract strategy. The working group focused on four possible alternatives (A, B, C and D). However, A and B were discarded for not attending to the restrictions related to the necessary cash and debt impact. Therefore, only C and D were analyzed, taking into account the five criteria with greater relative weight: cost, performance, deadline, control, and number of interfaces. Besides those, other criteria had also a significant contribution to the study. A sensitivity analysis took into account the independence of clusters and did not change the ranking of the alternatives, leading to a robust solution of the problem.