Andrew Dykes reports from the Industry Technology Facilitator annual Technology Showcase in Aberdeen, where the focus was on increasing the speed at which the industry takes up new ideas
To borrow a tired phrase: operators are from Mars; innovators are from Venus. At least, it often seems that way. But what sets the Industry Technology Facilitator’s (ITF) Technology Showcase event apart is its success in putting these two groups together – via a series of presentations, breakout sessions and a technology exhibition – providing equal balance to both the boardroom and the workbench.
In recent months, ITF and other bodies such as the Oil and Gas Innovation Centre (OGIC) and Oil and Gas UK have launched a number of initiatives to get more technology developers in conversation and collaboration with operators, to generate new ideas to solve old problems. That conversation is lively, and with developers travelling from as far afield as Australia, it is also of global importance.
Upping the uptake
ITF director Paddy O’Brien opened the conference with an emphasis on how it was seeking to “increase the speed of uptake,” and hinted at the launch of an exciting new technology “network.” Stay tuned for more.
The first conference session tackled the North Sea, with the UK Oil and Gas Authority’s (OGA) director for technology, supply chain and decommissioning, Angela Seeney, outlining how it was working to encourage new technology development. Echoing similar demands from operators, the OGA is looking for innovators to show evidence which can build strong business cases in order to get their new technologies noticed.
Her overall message was positive: with production efficiency rising to just under 80% in 2015, the outlook for UKCS production is improving steadily (even if prices are not). Building strong technology businesses now would help prepare UK industry to export its knowledge long after the North Sea has ceased production, she said, adding that the OGA’s goal was for the UK to become the second largest exporter of oil and gas services after the US (it is currently fourth behind Norway and France).
Centrica senior VP Colette Cohen drew attention to the fact that the introduction of new technologies had largely stalled in recent, high-price years. The cushion and driver of bringing new production on line has meant that few – if any – so-called “technology milestones” have occurred since the price rises of the early 2000s.
Cohen was evangelical about the possibilities of innovation from outside of the conventional envelope. While other sectors such as healthcare and automotive benefit from the internet of things (IoT), 3-D printing and advanced materials, oil and gas has been far slower at taking these up. The industry should “steal or adopt” these disruptive technologies, she said, because they “could be rapidly deployed if we stop thinking [the industry] is special or unique.”
GE Oil and Gas director of subsea technology Paul White struck a similar note when asking if the industry was “risk-averse because we don’t understand the risks?” A greater focus on fundamental engineering may be one way to help change attitudes, he suggested, adding that while new technologies are no silver bullet, they are an incredibly valuable tool.
It was refreshing to hear more figures looking to other industries for inspiration, and shows that the messages of previous Showcases are being heeded. Indeed, ITF’s director of strategic projects and international development, Keith Mackie, told InnovOil ahead of the event that “adoption and adaptation could be the watchwords” for a sector looking for new ways to cut costs.
Innovators vs. investors
With the operator and governmental perspective laid out, the second session sought to highlight various strategies which might help SMEs to bring their innovations to market, with some additional input from outside the industry.
Scottish Enterprise’s Maggie McGinlay outlined firmer plans for the long-awaited Oil & Gas Technology Centre (OGTC), backed by US$180 million in government funding via the recent Aberdeen City Region Deal. This funding will help propel SMEs and service providers to develop their solutions and encourage an “early adopter culture,” and support the OGA’s export goal. For smaller innovators in particular, it is hoped that the OGTC will prove transformative, with McGinlay drawing comparisons between its role and that of the GBP2 billion (US$2.9 billion) Aerospace Technology Institute in Milton Keynes.
Magma Global commercial director Charles Tavner offered a balanced perspective through having worked both as an investor and as a SME technology developer – Magma manufactures carbon-fibre composite pipes for use subsea. His central message was that innovators must provide clear, robust business cases if they hope to gain traction with operators. Anecdotally, he said that many companies would be sceptical or unreceptive if an innovation did not offer cost savings of over 20%. Demonstrating a sound understanding of exactly how and where a technology can save money is therefore vital.
Investors and operators should also take note. Tavner urged firms to find ways of accelerating technology adoption, in particular by committing to the early deployment of new equipment, and allocating enough funding to the project to make sure that happens. Yet in the current climate, he concluded, the opportunities for disruptive technologies with that robust business case behind them are “huge.”
Well-SENSE technology director Dan Purkis posed some general thoughts on his approach to innovation, suggesting that it centres on the question: “What if?” Purkis suggested hypothetically removing existing, integral technologies with a view to thinking more clearly about how that process could be done better. In his case, it was with a company called Petrowell which used RFID tags to replace conventional measuring-while-drilling (MWD) solutions.
He also offered a view from the other side of the boardroom door. As a technology developer, he presented on the difficulties he had faced in convincing operators to back and deploy his technology, despite their enthusiasm and professed need for cost-effective solutions. In his experience, the biggest barrier lies in the reluctance of operators to qualify innovations in the field. The equipment then becomes trapped in doldrums, whereby operators neither take unqualified technologies, nor will they qualify it themselves using their own fields and wells. A lack of alternative testing facilities – or their prohibitive expense – also makes overcoming this hurdle particularly challenging.
Purkis’ point sparked greater debate later in the Q&A session about how to share risk between operators and SMEs. It is hoped that the OGTC will remove many of these barriers by providing a network of solution centres, test facilities and incubator spaces where sufficient time and resources can be spent in qualifying innovations to the standards demanded by operators. That process is already under way, but is unlikely to produce results for at least a year or so. In the meantime, questions still remain over how larger companies can initiate a cultural change and accelerate adoption in the short term – questions which would continue to be hashed out over the rest of the day.
The afternoon was divided into four sessions, covering new technologies in the fields of Asset Integrity, Reliability and Production Efficiency; Well Plugging & Abandonment; Technologies for Marginal Developments and Small Pools, and Well Construction & Drilling Automation.
These sessions featured short “elevator pitch” presentations on a number of potentially game-changing technologies across the set topics. InnovOil particularly enjoyed Interwell’s use of thermite as a P&A solution, the National Physical Laboratory’s work on digital image correlation for inspection routines and NeoDrill’s Conductor Anchor Node (CAN) technology for top-hole well construction, all of which used accessible, proven technologies to great effect. Stay tuned for more information in later editions.
While the challenges – both physical and economic – remain great, ITF again has succeeded in proving that innovation is alive and well in the oil and gas industry. “This Showcase could provide the first steps towards addressing some of the key issues that keep the industry leaders awake at night,” ITF’s Keith Mackie remarked in the days leading up to the event. Let’s hope they have slept at least one easier night since.