According to the International Energy Agency, global energy demand will increase by 50% by the year 2030. To keep up with such a demand growth, technological innovations are required at a very fast pace. Open innovation, where expertise is used and adopted beyond disciplines, along with reapplication of technology well-known in one business to a completely different business holds the key to quantum leaps in technology. The case study discussed in this article demonstrates how both of these elements of open innovation can add a significant value to upstream. (For additional information on the concept of open innovation please see E&P January and August 2007 issues).

Need for data
As reservoir management becomes increasingly complex, the need for real-time data is also

A logical chain of events led from Chevron’s need for downhole communications to the acceptance of Inficomm as a solution. (Graphic courtesy of Mukund Karanjikar)
increasing. Companies across the industry recognize this and have launched efforts to create a data-rich and highly networked oil field. A major obstacle in this area is the ability to obtain accurate and continuous downhole data during production.

Wells are difficult environments for communication equipment, and existing technologies are challenged by several factors such as bandwidth, battery life, reliability and the need to cease production to take measurements. In spite of considerable efforts and many innovative products, getting real-time data from the wellbore is still a significant struggle.

From the battlefield
Chevron Engineer Manny Gonzalez turned to his associates at Los Alamos National Laboratory (LANL) with the hope that an infusion of fresh ideas and radically different talent would be of help. Engineers from Chevron and open-minded scientists from LANL started working together in order to find the common ground. LANL had worked on and developed a technology called Inficomm (short for infinite communication) to address the complex communication needs of the battlefield [LANL Doc ID# 07-7831].

Inficomm is based on the concept of “modulated reflectance” where wireless communication is carried out with electrical power needed only at one end of the communication chain. The other end — transmitter or receiver — can be entirely passive, drawing its energy from the electro-magnetic broadcast of a single source. The approach is essentially a high-tech version of a mirror sending Morse code via reflected sunlight. By diligently delving into the science of electromagnetic propagation, the team realized that the underlying principle of Inficomm would indeed apply to the downhole environment. This is where the science and engineering started converging.

Following a two-year collaborative development effort, Inficomm has gone through multiple field tests and demonstrated the ability to collect data from multiple sensors measuring multiple parameters. The sensors are battery-less, wireless and have demonstrated operating lifetimes exceeding industry standard systems by orders of magnitude. A lot of intellectual property has been created through this project, and efforts are underway to fully commercialize the system. In retrospect, we realized that such a gargantuan task takes more than science and engineering. Many other factors play an equal, if not more important, role.

Not just downhole
How did a technology far outside of oil and gas experience come to be adopted in the industry? What caused the application of fundamental physics to solve a long-term commercial problem? The short answer is “communication.” Reapplication of Inficomm was not completely accidental. It took a lot of communication for the convergence to happen.
Cross-fertilizing ideas does not come easily in many organizations. Some would even say that based on historical experience E&P as a discipline is not particularly welcoming to outside ideas. However, the scale and complexity of the E&P challenges being faced by the industry require that ideas come from new areas and the knowledge from new collaborators be connected to the experience of existing experts.

Innovation eco-system
The success of open innovation in the E&P environment depends not on a single factor but on building systems and organizations that encourage collaboration and risk-taking. The LANL-Chevron alliance that has led to Inficomm and several other significant advances consists of a structure carefully crafted to allow teaming across organizations, disciplines and work practices where people are allowed to try new ideas without the fear of failure. For example, Inficomm was recognized early in the discussion as being speculative and extremely high-risk. This did not stall the project but instead launched it with realistic expectations and objectives.

Apart from the established structure and open-minded communications as described above, it is extremely important to understand other key elements of execution:
There are no stupid questions. When you are collaborating with someone having a totally different background, expertise or disciplinary training from yours, always probe. If you are not a physicist, ask what is electromagnetism. This is the only way ideas can be brought to fertility in a nimble fashion.
Perseverance. Because the collaboration is exposing people from multiple collaborating organizations to new ideas and fields of discipline, it is not realistic to expect that revolutionary ideas will appear instantaneously. Multiple rounds of discussion are likely to be necessary. Do not hesitate to carry out proof of concept trials without much expectation.
Innovation management. The discipline of project execution should always be maintained in an open innovation engagement. However, project management must be adapted to allow innovation. For example, early project milestones should be about discovering information rather than delivering equipment or producing definitive improvements over existing technologies. Fluidity in management is a required element.
Infrastructure. By definition, open innovation brings entirely new ideas into play. These ideas must be tested early on, so access to test facilities that mimic real-world applications are mandatory. In E&P, test wells are especially helpful in sorting the crazy ideas from the crazy, wonderful ideas.
Commercial focus. When engaging groups not traditionally involved in E&P technology development, especially research institutions (basic as well as applied) such as universities or national laboratories, it is critical to understand from the beginning what additional partners may be needed to bring a new technology into full-scale commercial use. In many cases, neither the company facing the problem nor the research institution will be the one to deploy the technology on the large scale. The capabilities needed from additional collaborators must be established early in any project.

An increasingly useful E&P tool
Collaboration with organizations not traditionally involved in E&P work has demonstrated the ability to bring highly valuable solutions to formerly intractable problems. As the challenges to E&P grow, open innovation will become a tool of ever-greater value.