Research On Procurement Risk Management Of Overseas Oil Project For EPC General Contract Mode

EPC Mode is a widely used contracting method currently on the international market,which stands for Engineering, Procurement and Construction, and is also the preferred contracting model for Chinese offshore petroleum engineering project. It can be implicated from the ENR International Contractors Top 225 of 2012, that many large domestic enterprises went abroad, to participate in the construction of international projects in the international engineering construction market and played an important role. At the same time,we also clearly see that there is still a large gap between our contractor’s turnover and the turnover of large international contractors, and the competition is increasingly fierce. The traditional petrochemical industry is still the weakness to win for domestic contracting enterprises in overseas market. The main reason is the identification skill of procurement risk for offshore petroleum engineering EPC project and the control capability. Therefore, to study on procurement risk management for offshore petroleum engineering EPC projects is a necessary step to take during the procurement management process.This paper systematically summarizes in the 1st chapter the present situation of risk management and procurement risk management development both internationally and domestically in China, and the development trend of procurement risk management. It also mentions the necessity of study on procurement risk management, the study content and research method.The 2nd chapter outlines the main theories of EPC Mode and the current risk management, which enhance our understanding on EPC and risk management theory, as the theoretical foundation of the next step of risk analysis and assessment.The 3rd chapter summarizes procurement characteristics and the relevant legal environment under offshore petroleum EPC projects, in accordance with the referenced articles and industrial condition. It identified and analyzed systematically the procurement risks in the contract bidding phase and the whole project execution phase of the offshore petroleum EPC project, which are developed as the typical risk analysis system for offshore petroleum projects and meanwhile focus on four senior levels of risks which are quality risk,cost risk, progress risk and safety risk. This will lead to analyze the 1st and 2nd level of risks of procurement during the execution phase of EPC project.The 4th chapter completely clarified the definition and the method to use expert method,Analytic Hierarchy Process(AHP) technique, and Fuzzy comprehensive evaluation method for assessment of procurement risks.The 5th chapter used Kazakhstan Zhanarol oil and gas production project as a specific case to explore an effective way and system of procurement risk management for chinaenterprise offshore petroleum project, and ultimately realize the effective risk management of project procurement.