Report: Transforming construction - Lessons from oil & gas

14 November 2018

New downloadable report from MEED, in partnership with Mashreq, examines how the regional and global construction industry has much to gain from the oil and gas sector

The region’s construction industry is in a state of revival and can learn valuable insights from its oil and gas counterpart

With nearly $1.6tn-worth of major building and infrastructure projects planned or underway across the GCC, there is no doubting the vital role the construction industry plays in the region.

Yet despite its size and importance, the GCC construction industry faces challenges that are undermining the delivery of projects, the implementation of national visions and the sustainability of the industry itself.

Many of the problems are common to construction around the world. But the slowdown in investment in capital projects in the GCC since 2015 has exposed chronic weaknesses in the region’s construction industry.

These weaknesses, which include time-consuming disputes, cost and time overruns, safety flaws, payment delays and a lack of innovation, all stem from the basic principle of “lowest price wins” that underpins much project procurement in the region’s construction sector. It is clear to everybody involved in the industry that change is needed. The question is, how?

In its previous series of reports published in 2017/18, the MEED/Mashreq Construction Partnership examined the opportunity to improve the way projects are delivered in the GCC by harnessing the latest innovations and technologies that are being pioneered on best-practice projects around the world.

Stay updated with the MEED Mashreq Construction Partnership here.

But construction clients and contractors can also gain valuable insights by looking at how other industries have responded to similar challenges.

With $168bn-worth of projects planned or underway across the GCC, the oil and gas sector is considerably smaller than the construction industry in terms of the number of projects and the overall value of project spending. But despite this, it has much to offer in terms of project delivery.

The characteristics of the oil and gas projects market are fundamentally different to those of the general construction projects sector. Individual projects in the oil and gas sector are generally delivered on a far bigger scale than most construction projects, and they involve the delivery of complex process engineering systems embedded into their structures.

Crucially, different procurement models are utilised, with engineering, procurement and construction (EPC) contracts typically used, along with integrated supply chain management systems and long-term services agreements. Most important of all, the clients typically have a longer-term vision that is centred around national objectives.

Transforming Construction CoverIn this special report, MEED looks at the characteristics of the oil and gas projects market, the opportunities and challenges, and crucially, what lessons the construction industry can learn from how projects are delivered in the GCC oil and gas industry.

Download the report here.

 Find more details about the MEED Mashreq Energy Partnership here

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