The Effect of Strategic Procurement Management on Cost Overruns and Schedule Delays in Petroleum Engineering Projects in Ghana

Abstract

Petroleum engineering projects are highly capital-intensive and complex undertakings that frequently experience cost overruns and schedule delays, particularly in developing economies such as Ghana. This study examined the effect of strategic procurement management on cost overruns and schedule delays in petroleum engineering projects in Ghana. The study was guided by the need to understand how procurement-related practices influence project performance outcomes in the oil and gas sector. A quantitative explanatory research design was adopted, using a cross-sectional survey approach. Primary data were collected from 142 professionals involved in petroleum engineering projects, including procurement managers, engineers, contract administrators, and supply chain specialists. Data were analysed using descriptive statistics, Pearson correlation, and multiple regression analysis.

The findings revealed that strategic procurement management practices in Ghana’s petroleum engineering projects are implemented to a moderate extent. Cost overruns and schedule delays were prevalent across projects. The results further indicated a strong negative relationship between strategic procurement management and cost overruns (r = -0.62, p < 0.01) and between strategic procurement management and schedule delays (r = -0.68, p < 0.01). Regression analysis showed that strategic procurement management explains 41% of the variation in cost overruns and 50% of the variation in schedule delays. The study concluded that effective procurement management significantly reduces both cost overruns and schedule delays, with a stronger effect on schedule performance.

The study recommends strengthening procurement planning, improving supplier relationship management, enhancing contract administration systems, and adopting digital procurement technologies to improve project delivery outcomes in Ghana’s petroleum sector.