Breaking down the barriers to oil and gas technology implementation

October 3, 2011

The oil and gas industry has been urged to focus on the benefits of emerging innovative technologies and support their development instead of pursuing restrictive cost reduction measures.

The call for a longer-term industry view of technology development was made by Neil Poxon, managing director of ITF, technology facilitator for the global oil and gas industry, during a seminar on barriers to implementation last month.

The event attracted a large audience and also featured presentations from Greg Herrera, a partner at Energy Ventures, Emma Perfect, managing director and chief scientific officer of LUX Assure and Stuart Brown, global well intervention theme lead at Shell.

A number of difficulties faced by developers were highlighted as well as potential solutions which could help bring technology to fruition more quickly than the current UK average of more than 16 years from concept design to full field deployment.

Neil Poxon said: "There are a large number of barriers to implementation which can hold back technology development and delay entry into the marketplace.

"For many operators the cost justification needs to be there before they offer funding and trial oportunities and others simply don't want to use unproven technology in case it leads to additional costs to resolve any difficulties.

"There are however a number of solutions which can overcome some of these obstacles. Service companies and operators have a role to play in this process by working more closely with one another to identify their technology needs and helping those solutions through the development process.

"Operators should also be encouraged to focus on the value new technologies can add to their projects rather than looking at cost reduction measures."

Greg Herrera provided an insight on barriers to implementation from an investor's perspective and said that in some cases it can take several years for innovative concepts to reach field trials.

"Innovation and technology will be fundamental in delivering lower cost production of oil and gas over the next 15 to 20 years," he said. "There are a number of barriers which developers will encounter and they need to be realistic about timescales and capital needs when they start a project.

"Investing money early and understanding the current and future needs of your target market can help to avoid delays further down the line. Projects also stand a greater chance of success if the development team has industry recognised personnel who bring credibility and good contacts with them."

Emma Perfect spoke from experience as a technology developer and said that personnel changes in collaborating with operators and complex supply chains can cause frustrating hold-ups and expensive patent patent protection can discourage development.

She said: "In our experience sales seem to be made based on immediate cost savings, but how can we deploy new technologies which help to prevent or deal with future issues? We have also found that personnel changes during a development project can be problematic as it causes delays and replacement employees can often have other priorities and interests."

Stuart Brown added that operators and service companies can help raise awareness about technologies available in the market by educating their employees as well as focus their investment on solutions which will give back the greatest returns.

He said: "Our national oil and gas reserves are dwindling more quickly than predicted and new finds are often in challenging locations both geographically and geologically. To overcome these difficulties we all have a responsibility to encourage the development of new technologies."

During the closing remarks, delegates at the seminar agreeed that it was a positive step to identify the challenges to technology implementation and by working more closely together industry could help remove many of the obstacles which currently prevent  the latest innovations entering the marketplace more quickly.

The seminar was held at Aberdeen Exhibition and Conference Centre (AECC) on Wednesday, September 7 during Offshore Europe 2011.

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