Sam Wright speaks with programme director David Millar about the OGTC’s new start-up accelerator programme
Despite an industry-wide emphasis on innovation and cost-efficiency, the path for small start-ups and technology companies to enter the oil and gas sector has remained arguably much tougher than most.
One organisation trying to address this is the Oil & Gas Technology Centre (OGTC) in Aberdeen. Established in October 2016 with GBP180 million (US$255 million) in funding as part of the Aberdeen City Deal, and a frequent feature in the pages of InnovOil, the new administration has a remit to fund and develop new technologies from early stage through to commercial deployment.
One of its most recent initiatives to spur new ideas is TechX – a brand-new accelerator and incubator scheme, which is designed to fast-track the most innovative entrepreneurs, whose innovations have the potential to make a significant impact within the industry. The idea is to respond to the time constraints of a mature basin such as the North Sea, whose operational future remains uncertain, by taking new solutions to the market as quickly and efficiently as possible.
In February, 16 finalist companies were announced, representing a diverse range of specialisms, from drone and machine learning to seismic data acquisition. By mid-March, these 16 had been whittled down to the 10 successful TechX Pioneers. The cohort will now receive GBP25,000 (US$35,000) each in funding via the group’s venture capital partner BP Ventures, as well as the support necessary to make them market and investor-ready. Beginning in June 2018, over a 16-week period the OGTC says the firms will have access to business mentors, co-working spaces, industry partners, rapid prototyping and test facilities – as well as field trials, arguably one of the most important factors in securing industry confidence.
Up to GBP75,000 (US$106,000) in additional funding is also available during the 16 weeks. Following graduation the Pioneers will be transferred into a 12-month incubator called TechX+, and the two companies with the most exciting potential also have the opportunity of a further GBP100,000 (US$142,000) in funding from BP.
Filling the void
“Before we established the OGTC, and TechX in particular, there was a big gaping hole in the entrepreneurial support ecosystem for oil and gas,” TechX director David Millar told InnovOil. “We see ourselves filling that particular void and providing that end-to-end support to get these companies to a point where they can realise their full potential within the industry.”
In particular, the inclusion of BP Ventures as a strategic partner to the programme in December 2017 has proved particularly beneficial to the start-ups and the reach of the programme. “We’re delighted to have BP on board”, says Millar. “BP [has] an aspiration in that space to get involved much earlier on in the stage of companies. Most of these operator venture arms will only get involved when the company is generating revenue in the GBP3-5 million (US$4.3-7 million) range, rather than new but exciting start-ups.”
The present approach, as Millar says, may well be short-sighted for the wider energy sector. The Oil & Gas Authority’s (OGA) latest Production and Expenditure Report, released on March 1, predicts that investment and innovation will be instrumental in extracting an additional 2.8 billion barrels of oil by 2050. However, the oil and gas industry is notoriously risk-averse and hesitant to introduce new methods.
“I think that everybody would say that oil and gas are about ten years behind other industries,” he continues. “We’re very slow to adopt new technologies.”
That could change, but it will require a shift in strategy and thinking from the whole sector. “I think there’s a lot that we need to learn from other industries, there’s a mindset change and a culture change that’s required,” he added. “The ‘race to be second’ is a term that’s used a lot in our industry. Nobody wants to be first. We’re trying to buck that trend.”
Encouragingly, the TechX finalists were selected because they respond to a diverse and complex range of demands. “You’d think the majority of applications would be digital, but actually only a third were. The rest were spread across a number of the different themes we’re looking at, from asset integrity to wells to small pools,” he explained.
Shades of Grey
One of the most eye-catching of the final 16 is Picsea, which is using swarms of underwater drones to map previously unexplored regions. This approach, it says, means that its robots can work on their own, or in co-ordinated groups, without the need for the constant monitoring or expensive insurance required by other vehicles. Such “swarm” technologies are likely to form a major component of any future – largely robotic – subsea operations.
Another finalist, Tenzor Geo, is launching a new kind of low-frequency seismic survey technology that aims to make microseismic monitoring both safer and more exact. The group says that its passive technique can deliver deposit outlines, exact “sweet spot” locations and precise production and well positioning data with high accuracy, making resource evaluation faster and more cost-effective.
Tubular Sciences, meanwhile, has devised a metal-to-metal permanent pipe connection system. The early stage “ZIP” concept uses a joint that combines local elastic and plastic strains to increase strength and reliability in pipe connection, which could reduce both the time and personnel required for pipelaying operations.
Other finalists include Deep Cryogenics, which has developed cryogenic technologies for extending the lifespan of drilling equipment, and Blue Gentoo, a firm using artificial intelligence for gas hydrate management. Another start-up, Innerpath Technologies, is a pioneering a new way of carrying out downhole measurement.
Interestingly, both Blue Gentoo and Innerpath graduated from Grey Matters, an elevator programme targeting experienced senior executives who are either currently redundant or at risk of redundancy. The fact that both have been able to develop viable technologies and start-up businesses through the recently created programme shows the value and importance of investing in such schemes.
As well as the Pioneer Programme, TechX is partnering with London-based Deep Science Ventures, a so-called “venture builder” that aims to spot technology gaps in the energy sector and fill them with new companies and products.
“We’re bringing completely new thinking into the industry in terms of addressing some of the fundamental future challenges that the industry faces, and using deep science thinking and ideation to come up with totally new ideas and technologies to tackle that,” says Millar.
Of course, even the most innovative start-ups can offer no silver bullets – nor any guarantee of success. Yet in a tough environment, where the great majority of start-ups fail to make the grade, TechX and the OGTC should be lauded for offering opportunities that are often in short supply across the energy industry.
Blue Gentoo: Helping mitigate and manage the formation of gas hydrates and ensure the efficient dosing of ‘anti-freeze’ chemicals, saving millions of pounds.
Envio: Adapting its technology from the retail sector to track and verify equipment offshore. Intelligent equipment cases can remotely verify contents, location and usage.
Immaterial: Manufacturing super-adsorbent nanomaterials which can dramatically reduce the cost of separating, storing and transporting gases.
Paragon Inspection: Developing an integrated digital inspection technology which will transform the inspection of small bore tubing and reduce hydrocarbon leaks.
RAB Microfluidics: Pioneering ‘lab-on-a-chip’ technology to provide real-time condition monitoring and predictive failure analysis for rotating equipment.
Sensalytx: An artificially intelligent software platform that analyses and visualises fluid movement across multiple elements of an oil and gas well.
Specialist Safety Systems: Developing intelligent offshore solutions for safer and more efficient crane operation. This solution will help prevent incidents and fatalities.
Tenzor Geo: Using unique interpretation software and autonomous Ocean Bottom Seismometers to deliver an unprecedented accuracy in oil and gas deposit location.
Test 1 srl: Developing a sponge-like material that can soak up spilled oil in the ocean, which can be reused multiple times and allows the oil to be recovered for processing.
Tubular Sciences: Sealing technology that ‘zips’ pipelines together, which can be used for the full range of pipe-lay environments, including challenging and deepwater.