E&P industry needs to move from the space shuttle into the Star Trek era.
Clich?s can be quoted so often they make you wince when they are uttered. We’ve all heard them delivered at industry events: “Thinking outside the box;” “pushing the envelope;” “blue sky thinking;” and so on.
I’m as guilty of this as anyone, but after attending several events in recent months, I’m increasingly convinced that the upstream industry has passed a tipping point where it not only recognizes the need to do those things in these clich?s but is actively pursuing them.
A number of discussion sessions around the world have had this recurring theme: to go beyond the norm and achieve breakthroughs that are true step changes.
At a recent event in Aberdeen, Scotland, organized by industry-owned ITF (Industry Technology Facilitator), technology funding priorities for 2012 were announced. Members from the Middle East, US, Asia-Pacific, and Europe picked five key areas:
Unconventional reservoir characterization;
Unconventional tight gas productivity stimulation;
Subsea produced water separation cleanup for reinjection or disposal direct to the ocean; and
Nanotechnology for maximizing recovery.
They will put their money where their mouths are – approximately US $14 million will be spent on JIPs next year.
According to Neil Poxon, managing director of ITF, the industry is actively investing in R&D. “The clear message to come from our operator members is that funding new technology is a growing priority as reserves are harder to secure and new frontiers are being developed. This presents a major opportunity for any company inventing new technologies to receive up to 100% funding whilst retaining its intellectual property rights.”
One attending member, Azuddin Zaid, who is Malaysian state-owned operator Petronas’ manager of Future Positioning and Technology Strategy, said, “Technology development is crucial to us to improve the way things are done in terms of efficiency , increasing production – which is the ultimate goal of any oil company – and reducing costs to continue operations at an acceptable level.”
Another attendee, Abdulrahman Al-Mulhem, science specialist for Saudi Aramco’s Production Technology Team, added, “We are interested in about 80% of the challenges put forward and would be interested in supporting solutions to them as we aim to increase our recovery factor from 50% to 70%.”
But the long-term aim is to go much further. The ITF’s latest Call for Proposals, titled “Looking Beyond EOR,” is very ambitious. Pointing out the industry need to generate 50% more energy and 50% less COby 2050, the proposal is about trying to significantly improve the recovery factors of oil fields in a sustainable development.
Henry Ford himself is quoted as saying: “If I had asked people what they wanted, they all would have said faster horses!” The ITF says its members are “not seeking the faster horses” but rather are seeking to “move from the space shuttle into the Star Trek era.”
According to Poxon, “To make step changes, we need to think ‘out of the box’ to move beyond the here and now and release the solutions of tomorrow. We need to consider all aspects of oil and gas operations in order to achieve maximization of recovery.”
This means ideas that deliver incremental change won’t be enough. They’re asking for challenging and novel concepts that go far beyond current conventional approaches. The deadline for proposals is Jan. 27, 2012.
This is futuristic thinking when you consider we’re looking at a timeframe of 10 to 40 years. But it also is representative of a growing awareness within the upstream business that the time for simply paying lip service to these aims has passed.