Optimising Procurement Strategies for Cost Efficiency and Risk Mitigation in Petroleum Engineering Projects: The Study of Offshore Drilling Operations

Abstract

Procurement plays a pivotal role in shaping the performance of offshore petroleum engineering projects, where cost overruns, schedule delays, and high-risk exposures are frequent challenges. This research examines how procurement strategies can be optimised to improve cost efficiency and mitigate risks in offshore drilling operations. Using a project dataset covering total cost of ownership (TCO), schedule delays, and risk scores, the study evaluates the effectiveness of contract types, sourcing strategies, and digital maturity in influencing project outcomes.

The results reveal that framework and alliance contracts, particularly when combined with dual-sourcing strategies, achieve superior cost efficiency and lower risk scores compared to lump-sum and single-sourcing arrangements. However, schedule delays were found to be largely unaffected by sourcing strategies, averaging around 14–15 days across projects, suggesting that operational uncertainties and environmental conditions remain dominant drivers of schedule overruns. Correlation analysis further demonstrated weak linkages among cost, delay, and risk variables, highlighting the independence of these performance dimensions.

The study concludes that procurement optimisation requires a multidimensional approach: while flexible contracts and diversified sourcing reduce costs and risks, additional measures are necessary to address scheduling challenges. The findings contribute to both theory and practice by providing empirical evidence that procurement decisions must be integrated with operational risk management and digital innovation to achieve sustainable and resilient project delivery in the petroleum engineering sector.