Auditoría Interna.

Bayesian expert elicitation process presents the platform for experts to examine complex problems and provides solutions based on past experiences and skills (Bernardo 2003, Berger & Bernardo 2009, and Simon 2011). It is on this premise the pilot study data were collected. The pilot study was divided into two rounds using the same 7 experts’ discussed in the section above. Round involved the pilot participants providing consent before each was interviewed using 5 open-ended semi structured questions which address the research aim and objectives. The demographics of the 7 experts used can be viewed in table 6-1 below.

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Table 6-1. Demographics of Experts in Pilot Study Rounds 1 and 2

Code Gender Role or

Specialty Experience in costing? Work experience Company Work Location P001 F Project Engineer

YES 10-15yrs IOC Ghana

P002 M Cost

Estimator

YES 10-15yrs SC Gabon

P003 M Operations Manager

YES 10-15yrs NOC Nigeria

P004 M Cost

Engineer

YES 15-20yrs NOC Ghana

P005 M Project Manager

YES 15-20yrs IOC Nigeria

P006 M Project Manager

YES 10-15yrs IOC Nigeria

P007 M Cost

Accountant

YES 20yrs+ SC Nigeria

The questions for round 1 of the main study was used during the interview which can be found below:

154| P a g e 1. What are the causes of offshore deepwater drilling cost overruns? 2. How do you evaluate and analyse the critical cost factors in the Sub-

Sahara Africa offshore deepwater operations and identify the extent they contribute to cost overrun?

3. Using your data give the probabilities of the contributions of the identified cost drivers to cost overrun from 2003 to 2013.

4. Identify the limitations of your current cost estimation model used in your operations

5. How can offshore drilling cost overrun be reduced/eliminated? These questions were derived from the 3 objectives discussed in section 1.5 in chapter 1. It was clear after the round 1 that the respondents did not fully understand what some of the questions meant which made them give generic answers. To analyse the answers, a comparison was done with findings existing in literature and fresh findings that address the research questions. A reflective exercise after the interview with each expert revealed that the questions could best be answered and well followed by both the interviewer and interviewee if themes or headings

addressing each objective of the main study is used. Again, the researcher observed during the round 1 that some of the questions and key issues in literature should be explained during the training section to refresh the memory of respondents as some were cautious and reserved in sharing their thoughts because of concerns about the validity and support of those views in literature. Moreover, it became necessary to consider how to manage and control the experts to stick to addressing the questions being asked during the interview as 6 out of the 7 experts tend to talk too much and address issues not discussed. According to Fink & Kosekoff (1985), Lancaster et al. (2004), Ruxton & Colegrave (2006), and Simon (2011) facilitators of pilot study

155| P a g e should play active role by ensuring respondents stick to the issues been discussed by giving time quota for each question and offer extra time for further issues the

respondents would want to talk about after exhausting all the questions for the main study. This was adapted in the round 2 and the training for the experts gave a briefing on current findings in the literature. In round 2 lessons from round 1 were used to modify the arrangement and chronology of the questions which can be seen below:

Face-to-face Semi-structured interview questions 2

The questions being asked below are to help the researcher to understand the causes of cost overrun and to help identify the limitations in existing cost. Again data on the critical cost factors that affect overrun is collected to help in formulating a more robust cost estimation model for the oil and gas industry. Finally, opinions gathered from this questionnaire are used for analysis and discussion on how cost overrun can be reduced/eliminated in this study.

Respondents Opinion on Causes of Cost Overrun

1. What is your opinion on cost overrun in the offshore deepwater drilling

industry in the sub-Saharan Africa?

2. What are some of the major causes of cost overrun in the offshore deepwater

drilling projects in sub-Saharan Africa?

3. Do you consider delays, politics, and depreciation of local currency to be

critical cost factors in the offshore deepwater drilling projects in sub-Saharan Africa?

156| P a g e 4. Relying on your data on past projects, how would you describe the impacts of

these 3 Critical factors to cost overrun in your operations?

5. Relying on your past project cost estimates on drilling projects, can you please

give your opinion on the probability of the contributions of delays, politics and depreciation of local currency from 2003-2015?

Table 6-2. Probability response sheet

Year Probability of Delay Probability of Politics Probability of depreciation of currency 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015

157| P a g e 1. What method/process or model do you use for your project cost estimations?

2. What are the strengths and weaknesses of your current cost model/method?

3. Could you explain if your current model makes use of expert judgement

4. Could you give your opinion on the impact of having a cost model built on

expert judgment for offshore deepwater drilling projects?

Respondents Opinion on solution cost overrun

1. What is/are your opinion/s on the integration of models as a solution to reduce

cost overrun in the offshore deepwater drilling projects in sub-Saharan Africa?

2. Could explain/discuss ways offshore deepwater drilling projects in sub-

Saharan Africa can be reduced or eliminated?

3. Do you consider Bayesian and ABC model to possess better estimation

accuracy compared to your current model? Why?

The results from round 1 and 2 are discussed and analysed in the next section.

6.5.1.4 Analysis of the Bayesian expert elicitation pilot study

To comprehend the results of the pilot study, evaluation of its design, conduct, analysis, and interpretation is discussed. The flow of participants through each stage of the study can be seen through the use of the proposed improved elicitation process in figure 5-2 as explained earlier. The background and preparation involved contacting the module leader for the MSC Oil and Gas Management module at Coventry University to gain access to the participants and booking of a room prior to the day of the study. As explained above, preselection questionnaires were given to potential respondents and the 7 qualified experts were motivated, briefed and trained for the

158| P a g e elicitation process. Individual respondents were elicited first through a recorded interview which was an average of 10-15 minutes followed by the group elicitation. Responses and probabilities were collated and were assessed. The improved elicitation process was found to be simple, comprehensive and detailed compared to the current elicitation process shown in figure 5-1.

The 7 experts rated politics, delays, and depreciation of currencies as critical factors that contribute to cost overrun in the sub-Sahara Africa just as the literature has suggested. Other equally important factors mentioned were the lack of detailed plan, poor resources derivation and allocation, lack of risk management process or procedures, poor team members-lacked of qualified workers, lack of due diligence of supplies and vendors and not having a clear understanding of project scope, objectives have huge impact on cost as every extra cost identified affect the project and obviously increases cost above the budget planned. The individual probabilities for the 3 critical cost factors for each of the years from 2005 to 2015 can be seen from the pilot study appendix 5. Notwithstanding, a summary of the aggregated averages for each expert on the 3 cost drivers can be seen in table 6-3 below.

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Table 6-3. Pilot data breakdown

Reference Role Experience %Politics %Delays %Currency

P001 Project Engineer 10-15yrs 25% 35% 40% P002 Cost Estimator 10-15yrs 35% 35% 30% P003 Operations Manager 10-15yrs 50% 25% 25% P004 Cost Engineer 15-20yrs 20% 45% 35% P005 Project Manager 15-20yrs 45% 35% 20% P006 Project Manager 10-15yrs 40% 35% 25% P007 Cost Accountant 20yrs+ 55% 25% 20%

Total avg. n/a n/a 39% 34% 27%

Overall, the aggregated average of the experts on the probability politics, delay, and depreciation of currency contributing to overrun was given as 39%, 34%, and 27% respectively as shown in the table above. The averages were calculated by dividing the total number of respondents to the sum of all the individual probabilities for each cost driver which is valid and meaningful according to Niazi et al. (2006), Qian & Ben-Arieh (2008), Yongqian et al. 2010, and García-Crespo et al. (2011). From the table above, it can be suggested that politics is the highest contributing factor of cost overrun in the offshore deepwater drilling industry in the sub region of Africa. A

160| P a g e critical look at the individual averages over the years 2005 to 2015 gave a different picture. For example, respondents P001 and P004 from Ghana had contrasting probabilities for each cost factor. Whereas respondents P001 attributed 25% to politics, 35% to delay, and 40% to the deprecation of the cedi as overrun causes, P004 thought delay is the highest threat with 45% probability followed by Cedi depreciation (35%) and politics 20%. Whereas it was not expected to get the same views and opinion from the experts, it is curious to understand however if the difference in opinion can be attribute their roles or responsibilities and a number of years of experience as P004 is a Cost Engineer with 15-20years experience whereas P001 is a Project Engineer with 10-15years. Respondents P003, P005, P006 and P007 all from Nigeria all agreed that politics is the highest contributing factor to cost overrun followed by delays and depreciation of the Naira though each had a distinct probability average as can be seen above. In a nutshell, the pilot study gave a vivid indication of how the main study could play out Pilot 1 revealed the weaknesses in the study protocol which helped to improve Pilot 2 results discussed in this section. It was suggested by Burrows et al. (2001), Cook et al. (2005), and Simon (2011) that the interpretation of pilot study results should focus on the feasibility taking into account the stated objective and criteria for success of the pilot study. The results from the pilot 2 suggest that the achievement of success criteria 3. Continue without any modifications, but monitor closely- i.e. study would achieve intend results with close monitoring. This is because the pilot results have shown that the current study protocol has the capacity to help derive the needed answers to the research objectives and questions.