Technological progress and innovation are key to the oil and gas industry. We may have found the ‘easy’ resources – although the geologists who explored for hydrocarbons with a compass and a hand-drawn map in the days before sat-nav and mobile phones may dispute our definition of easy – but we need to constantly innovate in order to locate and extract the remaining reserves.
Aided in recent years by consistently high oil prices, but also by the realisation of this need, the industry has been spending considerable capital on R&D in a wide range of fields – from automation and robotics to biotechnology, nanotechnology and data analytics – and in developing techniques like microseismic and multistage fracking. In addition, significant sums have been spent on technologies to enhance production from both new discoveries and more mature fields.
A recent worldwide survey of senior industry executives undertaken by Lloyds Register* attempts to assess innovation trends and drivers in the sector. While nearly 60% of the respondents said their company had increased R&D spend in the last two years, the report found that technologies to extend the life of current assets or improve efficiency get the greatest priority. Three-quarters of those questioned said that pressure to innovate has intensified, yet only 25% admitted to being ‘early adopters’ of technology; 20% preferred waiting until a technology was established before adopting it. Unsurprisingly, the survey found that cost was the biggest barrier to innovation, followed by uncertainty over returns, as well as worries about skills shortages.
The oil and gas industry is often considered conservative and inherently risk averse. This survey was undertaken before the recent plummet in the oil price; it would be interesting to know whether the 69% of respondents who said they would be increasing their R&D spend over the next two years would still say the same? What then do we need to do to continue developing technologically?
Collaboration may become an important factor, both between E&P and service companies and also with partners beyond the industry. And we must continue to invest in training and development, encouraging young minds to tackle the issues of innovation in the future. No matter how clever a technology is, people are the key to its implementation and success.
* Lloyd’s Register Energy: Oil And Gas Technology Radar
Jane Whaley, Editor-in-Chief
