In the oil and gas sector, capital projects operate in a high-pressure environment where there’s little room for error. These projects, often valued in the billions, require careful coordination, top-tier expertise, and a relentless focus on meeting deadlines and budgets. But increasingly, Owners are finding themselves in a tough spot: their EPC contractors—those trusted to deliver these complex projects—are reporting delays and cost overruns far too often.
As an Owner, it’s more than just a frustrating scenario—it’s a cause for serious concern. The ripple effects of these setbacks go beyond the project itself, potentially harming your bottom line, shaking investor confidence, and even affecting your organization’s reputation. You’re likely asking yourself: how do we manage this unpredictability, and what steps can we take to reduce the risks?
Acknowledging the Realities Contractors Face
Let’s start with understanding the landscape. EPC contractors today are up against a lot. Projects are getting more complex, markets are unpredictable, supply chains are fragile, and there’s increasing pressure to integrate sustainable practices. All of this can strain resources and push margins to the limit.
That said, understanding these challenges doesn’t mean accepting poor performance. You have every right to expect your contractors to manage their responsibilities effectively, with transparency and accountability. But it’s clear that there’s often a gap between what’s expected and what’s being delivered.
The Power of Proactive Engagement
Bridging this gap starts with proactive engagement. Accountability is crucial, but it’s equally important to stay actively engaged throughout the project. Regular check-ins, open communication, and a collaborative mindset can help spot potential issues before they become major problems.
One approach is to ensure you have access to real-time data on every aspect of the project. This level of transparency allows you to be more than just an observer; it enables you to take an informed, hands-on role when necessary. By building a culture that values transparency and teamwork, you can work alongside your contractor to tackle challenges as they arise, rather than reacting to them after the fact.
Rethinking How You Choose Contractors
Another key aspect is rethinking how contractors are selected. Traditionally, cost has been a significant factor, but the lowest bid doesn’t always lead to the best results. It’s worth considering a more comprehensive approach that looks at a contractor’s track record, their capacity for innovation, and their experience with similar projects.
Taking the time to thoroughly vet your contractors can prevent a lot of headaches down the line. Look for partners who are not just focused on getting the job done but are also committed to continuous improvement and are willing to embrace new technologies and methods to ensure success.
Leading Through Tough Times
When a project starts to go off track, strong leadership is crucial. As an Owner, your role is to help steer the project back on course. This doesn’t just require technical know-how but also an understanding of the pressures your contractors are under.
Leading with empathy doesn’t mean being soft—it means listening, understanding, and then making informed decisions that will benefit the project as a whole. It’s about setting clear expectations while also providing the support your contractors need to succeed.
Moving Forward Together
At the end of the day, the success of any capital project in the EPC industry is a shared responsibility. Contractors must do their part, but as an Owner, you also need to be engaged, informed, and ready to lead. While the path forward may be difficult, a cooperative strategy can help us overcome these challenges together.
Remember, while delays and cost overruns are serious issues, they’re not the end of the road. By choosing the right partners, staying actively involved, and leading with both strength and empathy, you can guide your projects to successful completion—and secure the long-term growth and resilience of your organization.
Contact us at https://buromatei.com/contact to discuss how we can support your capital projects, reduce risks, and ensure on-time, on-budget delivery.