to Mitigate Materials Procurement High Risks
FEATURED PAPER
By Khalid Zaki Alawaji and Anwar Zumah
Kingdom of Saudi Arabia
Abstract
As there are emergent risks on global markets that can jeopardize oil and gas projects completion, assigned project teams shall identify all related mitigation and avoidance plans for materials procurement risks during early stage of project life cycle. This paper maps out most common delay causes, for materials procurement phase, which occurred frequently and had negative impact on the execution of oil and gas projects, during 2020. In addition, short and long-term applicable response plans are developed for materials driven projects in order to mitigate related threats and avoid execution delays for future planned projects in the next 24 years. Those risks and response plans shall be reviewed regularly during all project’s phases.
Key Words: Risk Management, Project Management, Materials Procurement Risks
Introduction
Since oil and gas projects are usually following plan driven method, which divides project into phases, all emergent risks on market conditions and technologies should be identified early in project cycle and assign appropriate and doable risk response.
Risk management is an essential process to deal with projects complexity and related tolerances at all phases of the project life cycle. (Yap, 2021) Iterative risks identification and review during all phases of oil and gas projects will definitely reduce uncertainty, possibility of risks occurrence during later phases and will contribute to the project success. (Alavi, 2020) Project execution team is required to plan their response plans for all identified risks that might encounter. (Yap, 2021)
In this paper, the focus would be on the materials procurement phase, which is highly contributing to project success as delivering required materials inline with projects’ schedules are crucial milestones to meet execution plans. Managing materials procurement risks, which consist of and not limited to supply and logistics risks, are highly contributed to project success. Supply risks are mainly related to raw materials procurement from manufacturers, while logistics risks are concentrated in delivering those raw, and fabricated materials to end users.
Those materials related threats could hinder projects completion if were not constantly reviewed and mitigated through project life cycle. Mitigation of those materials related risks will build and enhance project resilience. (Wilding, 2021) Since project execution team anticipates those materials related threats will occur more frequently, execution methodologies should cope up with those potential risks to be more adaptable and resilient to ensure new projects success over the next 24 years.
On the other hand, Energy Outlook report, which was issued by OPEC in 2020, projected that oil and gas demand over the next 24 years is increasing as shown in Figure 1, in which new investments are required to be made. In addition, Figure 2 illustrates refinery related new investments, which are projected to be made from the year 2020 to 2045 to meet future energy demand. (OPEC, 2020)
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How to cite this work: Alawaji, K. Z. and Zumah, A. (2026). Increase Oil and Gas Projects Resilience to Mitigate Materials Procurement High Risks, PM World Journal, Vol. XV, Issue III, March. Available online at https://pmworldjournal.com/wp-content/uploads/2026/03/pmwj162-Mar2026-Alawaji-Zumah-Increase-Oil-and-Gas-Projects-Resilience.pdf
About the Authors
Khalid Zaki Alawaji
Kingdom of Saudi Arabia
Khalid Zaki Alawaji, MSc, PfMP, PgMP, RMP is a project management professional with more than 12 years of experience. He holds Bachelor and Master of Science degrees in Chemical Engineering from Oregon State University and University of Southern California, respectively. Khalid, currently, is working as a Project Management Supervisor and member of Gas Processing Standards Committee. Also, Khalid has obtained several credentials, including Program Management Professional and Portfolio Management Professional from Project Management Institute.
Anwar Zumah
Kingdom of Saudi Arabia
Anwar Zumah is an experienced Investment Vice President at a leading global sovereign wealth fund, with a robust background in investments, project management, strategic planning, mergers and acquisitions, and operational excellence. Skilled in applying Lean and Six Sigma methodologies to drive efficiency and value creation. Holds a Bachelor’s degree in Industrial Systems Engineering, combining technical expertise with strong leadership across high-impact initiatives.
