Abstract for:A system dynamics model to investigate the effect of mismanagement on Iran’s oil and gas projects: A case study of South Pars field

After sanctions and quitting well-known experienced companies from Iran’s gas and oil industry, there was no way except assign the projects to inexperienced domestic companies, which in turn ended up to enormous “reworking” rooted in lack of knowledge and “mismanagement”. In this article, the “Pars South” project has been selected as a case study in which the contractor (Khatam) claims that the main reason for its huge cost and time overruns had been sanctions and “he has done everything to manage this problem properly”. Yet, Iran’s Oil Ministry (employer) asserts that a high percentage of these overruns had been due to “mismanagement”, not sanctions. Assuming that this case would be examined in a hypothetical court, we have tried to find out “how much could mismanagement really have affected”, by using system dynamics approach. The main core of the model is Ken Cooper’s “rework cycle” model, and the model is fragmented into three sectors, including implementation, finance, and procurement. Finally, after modeling and simulating the case we found that the claim of Iran’s Oil Ministry is true and mismanagement could have caused about 3.6 billion dollar and 2.5 years overruns