Abstract Integrated development projects in the oil and gas industry are exposed to multiple layers of risk, including operational, financial, and stakeholder-driven challenges. Effective risk management frameworks are essential to balance technical uncertainties with commercial constraints while maintaining project efficiency. This paper presents a structured approach to risk management in a high stakes drilling environment, focusing on a lump sum turnkey (LSTK) project executed for a Middle East operator. The study highlights best practices for risk identification, assessment, mitigation, and stakeholder engagement to enhance project resilience and long-term value creation. The primary objectives of this paper are to establish a structured risk management framework tailored for complex drilling and well development projects. To analyze financial and contractual risk mitigation strategies in LSTK projects. To demonstrate the role of stakeholder engagement in reducing project uncertainties and commercial disputes. To provide practical recommendations based on real-world project execution in a Middle East field. This study adopts a multi-dimensional approach to risk management, combining technical, financial, and stakeholder-driven methodologies. The framework is derived from actual project execution experience in a high-risk drilling environment and is structured as follows. Risk Identification & Categorization: A systematic evaluation of drilling, well integrity, and commercial risks, incorporating real-time operational challenges such as the risk of stuck pipe, wellbore instability, and cost overruns. Risk Assessment & Quantification: Utilization of probabilistic risk assessment (PRA) techniques and scenario modeling to quantify potential project impacts. Mitigation Strategies: Implementation of proactive measures such as design optimization, real-time monitoring, and contingency planning to minimize risk exposure. Stakeholder Management: Development of risk-sharing mechanisms through collaborative engagement with key stakeholders, including operators, service providers, and regulatory bodies. Financial & Contractual Risk Management: A case study of commercial claim resolution, analyzing negotiation strategies and contract interpretation to mitigate financial exposure. The risk management framework presented in this paper was successfully applied in a Middle East project, leading to improved decision-making, reduced financial exposure, and enhanced operational performance. Key outcomes include: Reduction in Operational Downtime: By proactively addressing drilling risks and implementing advanced well planning, the project achieved a significant reduction in non-productive time (NPT). Effective Stakeholder Alignment: Strategic engagement with stakeholders facilitated the resolution of contractual ambiguities, minimizing disputes and improving collaboration. Optimized Cost Management: A structured risk register and financial monitoring process enabled better budget control, preventing cost overruns in the LSTK contract. Enhanced Project Resilience: The integration of technology-driven risk mitigation strategies, including real-time monitoring and optimized well design, contributed to overall project success. This paper provides a unique, field-tested approach to risk management in LSTK projects within the Middle East region, offering practical insights beyond theoretical frameworks. Unlike conventional risk management studies that focus solely on technical aspects, this research integrates financial and stakeholder considerations to develop a comprehensive strategy. The case study illustrates how real-world challenges in high-risk drilling environments can be effectively managed through a structured approach, making it a valuable reference for industry professionals involved in complex oil and gas projects.
Silva et al. (Tue,) studied this question.