CLAIM AND CONFLICT MANAGEMENT IN INTERNATIONAL OIL AND GAS PROJECTS

Today, many oil and gas projects were set up to satisfy petroleum and natural gas increasing demand caused by dramatically development of global economy. These projects are often large in terms of budget and people. They tend to be complex, with multiple zones, language barriers, and differing legal requirements, as well as cultural differences. Partner selection is very important and is a critical variable because it affects too much on project success and influences the overall mix of available skills and resources, operating policies and procedures of project.

In international oil and gas project, a multi projects group has a much broader range of knowledge, skills, abilities and experiences. The project management team has to deal with many issues such as logistical, governmental, communication due to different languages and values. These issues if not properly deal with, might cause for possible conflicts. The best project manager must know how to manage conflicts using different styles, depending on the circumstances in order to effectively supervise a diverse team.

The worldwide trends of joint ventures are increasing but with very unsatisfying results. To be able succeeding in an international project, major conflicts need to be managed. However, conflict in the workplace just seems to be a fact of life. But conflict isn’t always exactly a bad thing. According to the modern view of organization conflict “conflict within certain limit is essential to productivity”. In many cases, effective conflict resolution can make the difference between positive and negative outcomes.

Mr. Dang Huu Trinh made a case study on”Claim and Conflict Management in International Oil and Gas Projects”. In this study, he wanted to (1) identify types of conflicts and the source of conflicts occur in an international oil and gas projects; and (2) identify conflict management styles which are effective to solve the problems.

He also wanted to bring out in his study, how to solve fails of international oil and gas projects caused by conflicts during construction and operation. He conducted two case studies on which in this research work mentioned two different conflicts which frequently meet in project, specifically in Vietnam.

Based on the information he gathered, Mr. Trinh found out that the conflicts existed in international oil and gas projects normally relate to culture. Source of conflicts are different personalities and point of views, miscommunication, context and disbursement issue. The research findings revealed that the best approach for project manager to handle conflict in international oil and gas project is an “integrating style”. When working in multi-cultural projects, the project manager must be prepared for conflicts that might arise and must learn how to react with it differently. The project manager working in a multi-cultural project must have the following:

1. Culture awareness and competency: the manager should become aware of the cultural norms. He should understand the specific cultures with which he is working and last but not least he should develop a relevant skill set.

2. Conflict management: the manager should have an array of conflict management skill. He should be aware of how a conflict can arise, how it is dealt with and how to prevent it.

3. Project management: the manager should understand the strengths of his team and should be able to optimize these.

His thesis abstract is copied and posted.

ABSTRACT

Oil and gas projects are established intensely to satisfy the energy demand on the world. To operating effectively, alliance are increasingly being used as strategic organizational form in international in which each of attendant parties possessed strength in field related to project. In cooperating process, conflict and problems among parties are unavoidable; awareness and carefully managing conflict during construction stage play a key role in the subsequent success of projects. The theme of conflict management styles has been the focus of extensive research in social psychology, organizational behavior and the field of cross-cultural management.

By finding out and analyzing the conflict happening in Dung Quoc and Ca Mau project, through collecting data and interviewing staffs and relevant persons, the research study aim to identify and analyze the conflicts and problems as well as resolutions and try to suggest a conflict management styles which are effective to solve the problems.

A conflict management style was developed as a result of the research case study which is helpful for international oil and gas projects wishing to overcome obstacles by identifying the conflicts and solving them.