National oil companies (NOCs) have long been motivated by different metrics than their international cousins. Typically, they are more concerned about long-term sustainability than short-term gains.

But they face the same challenges as any other energy company when it comes to tackling stubborn subsurface challenges. And they respond the same way – by funneling money into R&D to create new innovations to solve these problems. Here is a snapshot of how three NOCs are focusing their research.

Saudi Aramco

Energy giant Saudi Aramco prominently figures R&D into its transformation program, which is turning the NOC into a fully integrated energy and chemicals company. Contributing to Saudi Aramco’s strategy for future success is R&D. The company clearly has embraced the strategic goal of becoming one of the world’s leading creators of energy technologies by 2020. It is multiplying funding for in-house R&D while forming world-class strategic alliances as part of its R&D global expansion. Saudi Aramco’s annual capital budget has increased tenfold from US $4 billion to $40 billion in the last 10 years. Part of this increase has been in the form of investment in talent, R&D, and technology.

“We need all energy sources, all industry players, all governments, all academic and research institutions, and all energy bodies working together in the global energy village,” said Saudi Aramco’s President and CEO Khalid A. Al-Falih during the keynote address at the World Energy Congress in Daegu, Korea, at the end of last year.

He outlined four prerequisites for success: pragmatic global energy policies, long-term industry investment, R&D and technology, and collaboration. The company has been focused on crude oil and gas, and R&D efforts have now broadened and expanded as it explores areas such as unconventionals and chemicals.

Upstream R&D outlook

The company’s outlook on R&D and technology development continues to be strategic and long-term. During the Offshore Technology Conference, Saudi Aramco executives offered their outlook specifically on upstream R&D and its associated technology development. The takeaway for industry was clear: Saudi Aramco is pushing forward from a traditional role as consumer of technology to becoming an enabler and creator of new technologies to bring about breakthrough achievements.

The high-impact R&D taking place continues to support these three strategic aims: increasing oil and gas reserves, improving recovery rates, and developing improved refining processes. The current upstream roadmap includes the characteristic subsurface technology domains of the geosciences, both geophysical and geological; drilling; production and reservoir engineering; and computational modeling.

If anyone doubts that R&D investment has paid off for the NOC, currently Saudi Aramco is on track to increase the average of its conventional oil recoveries to 70%, which is more than double the current world average.

Saudi Aramco researchers are asking tough questions as they look to maximize oil and gas reserves: Can we acquire four times the data yet reduce acquisition time and cost by 50%? Can we achieve 1.5-m (5-ft) seismic resolution at 4,572 m (15,000 ft) deep? Can we invert the full waveform in just a day instead of weeks? These questions will bring about new offshore seismic acquisition platforms to reduce cost and time while providing enhanced subsurface imaging.

In terms of reservoir engineering, focus areas include EOR, pore-scale physics, waterflooding using modified water or “smart water,” and unconventional resources. Again, questions being asked by Saudi Aramco researchers are intended to drive new innovations: Can we increase recovery by 15% to 20%? Can we measure reservoir data with high accuracy?

Finding novel approaches to maximizing the potential of its oil and gas reserves has been a hallmark of Saudi Aramco. Its in-house initiatives in areas such as Smart-Water Flooding, GigaPOWERS, MRC Complex Well Design and Optimization, and Quantitative Remaining Oil Saturation and Intelligent Field Technology drew the interest of the industry and provided topics of discussion and technical paper highlights for industry conferences such as that of the Society of Petroleum Engineers. The sophisticated techniques and processes were born from innovative thinking, and the company now enters a new era of challenging itself even further.

Global R&D network expands

Key to this challenge is further extending its global R&D network. The company has two main R&D centers located in Dhahran, Saudi Arabia. The Exploration and Petroleum Engineering Center Advanced Research Center (EXPEC ARC) and the Research & Development Center (R&DC) both conduct pioneer research into cutting-edge technologies and energy research. These centers are further supplemented by research centers in Aberdeen, Scotland; Delft, Netherlands; Paris; Beijing; and Thuwal, Saudi Arabia.

This global R&D network recently expanded with the addition of three new R&D facilities in the US. The Aramco Research Centers in Boston, Houston, and Detroit are operated by Saudi Aramco’s US subsidiary, Aramco Services Co. (ASC), headquartered in Houston. The three centers were operational at year-end 2013 and strategically positioned to further strengthen Saudi Aramco’s R&D capabilities.

“The US-based centers will help us leverage scientific expertise and bring solutions to the challenges of energy exploration and production,” said Mustafa Ali, director of R&D at ASC. “The expansion is about collaboration, establishing strong, strategic relations with specialized centers of excellence to address more far-reaching challenges. It will accelerate and expand the company’s capabilities by bringing together top global talent.”

Aramco Research Center-Houston has become the company’s largest R&D center in the US. Located in the city’s energy corridor, the 4,180-sq-m (45,000-sq-ft) facility is focusing on upstream oil and gas R&D. Teams of researchers, scientists, and engineers are working through a variety of approaches in the areas of geology, geophysics, reservoir engineering, and production technology to bring about new advances.

With much discussion taking place on unconventionals, the Houston location will be key to developing a fundamental understanding of the geochemistry of unconventionals to describe the transfer of bioto, or the ecology of a geographic region, into recoverable oil and gas. This initiative will involve integration with other disciplines such as geophysics and geomechanics to take a holistic approach to unconventional R&D initiatives.

Saudi Aramco, now just two years into its unconventional gas program in Saudi Arabia’s frontier Northern Region, has found great potential. The company recently announced it has committed gas for the development of a 1,000-MW power plant, which will feed a massive phosphate mining and manufacturing center, driving that region’s development and prosperity.

The center in Boston, the first to open in 2013, supports computational reservoir modeling, nanotechnology, and advanced separation technology systems. The research encompasses materials synthesis, characterizations, and evaluation of novel functionalized nano-materials with the focus on applications in separations, low-energy chemical conversions, and reliability enhancement of metal structures.

Nanotechnology

Saudi Aramco’s pioneering efforts in the application of nanotechnology for the oil and gas industry are well known. Its in-house developed reservoir simulator tool, GigaPOWERS, allows engineers to virtually look inside a reservoir to view a reservoir’s formations, oil and gas pockets, faults, and other characteristics in a timely manner. The simulator tool uses 1 billion cells, allowing a clear and detailed picture of the reservoir to be painted, much like the many pixels on a high-resolution computer monitor or television. The Aramco Research Center staff in Boston is dedicated to building on this robust tool as reservoirs become more complex with multiple wells.

R&D focused on commercial application

While tackling a broad range of R&D activities, the company’s focal points of research are carefully selected through a rigorous process based on the greatest potential of business impact addressing the highest business priorities. Saudi Aramco innovation has led to patented inventions, including a tool for locating and plugging lateral wellbores, flare stack and combustion apparatus, automated real-time reservoir pressure estimation, and advanced petrophysical algorithms fostering the shift from well-centric to model-centric workflows.

The commitment to commercializing R&D activities is further evidenced in the establishment of Saudi Aramco Energy Ventures, established in 2012 as a venture subsidiary to invest globally in start-up and high-growth companies with technologies of strategic importance to Saudi Aramco. North American and European venturing activities figure prominently into this strategy.

With the long-term commitment and investment being made through expansion in North America and continued development of R&D alliances and collaborations throughout the world, Saudi Aramco’s R&D efforts will continue to bring forth new technologies with commercial applications in the foreseeable future.

Petrobras

R&D activity has been an integral part of Petrobras’s business plans since the company’s formation in 1953. With the NOC having averaged an annual spend of almost $1.2 billion on R&D between the years 2010 and 2012 and more than $800 million per year on average over the four years preceding that, it has grown its research expenditure by a yearly average of 22.7% over the last decade.

It remains clearly committed to the cause of developing new E&P technologies, driven almost entirely by the fact that the vast majority (currently more than 90%) of its future recoverable reserves lie in deep and ultra-deep water. It has, as a result, been a world leader in this frontier segment of the industry for almost two decades.

Maria das Gracas Silva Foster, the company’s CEO, stressed at the recent OTC Brasil conference that a collaborative approach with Brazil’s universities and research institutes at home and abroad has been and remains the key to its investment in new technologies. “We have spectacular universities in Brazil, we have an intelligence network, and we have invested heavily in technology in Brazil,” she said.

CENPES R&D hub

Much of that investment has centered on its CENPES facility, covering 300,000 sq m (3.2 million sq ft) on Fundao Island in Rio de Janeiro. The research center has more than 220 laboratories, is the largest in Latin America, and is still expanding, while also acting as the central hub in an information network reaching out to 88 universities in the coordination of 49 thematic networks.

Each network includes a range of universities and research institutions working on a technology theme directly related to the company’s own business goals. And this has been helped by the presalt boom of the past several years, with the increasing scale and complexity of its project demands causing a growing number of the world’s leading oil and gas contractors to build their own research centers in Brazil close to Petrobras’s own facilities or those of its partner universities. Companies that have done this include Schlumberger, FMC, Baker Hughes, Halliburton, GE Oil and Gas, Siemens, and BG Group.

Procap research programs

Petrobras has been heavily involved in collaborative pan-industry technology initiatives such as DeepStar (now in Phase XI) but has in parallel pushed its own Procap deepwater technology initiatives hard since the early ‘90s. The first Procap program was created to develop technologies for producing fields in water depths of more than 400 m (1,312 ft), with later versions (Procap 2000 and Procap 3000) extending that water depth capability.

The latest evolution of that bloodline is the Procap Visao Futuro (Future Vision), which is aimed at anticipating future needs and providing and improving the technologies required. It has brought together more than 40 institutions from around the world to tackle research into areas including logistics, reservoirs, sustainability, and well engineering.

Solange da Silva Guedes, the company’s E&P executive manager for production engineering, described the Procap programs as “road maps” that have helped Petrobras collect many robust solutions along the way.

She stressed the need for collaboration throughout the process. “The collaboration with universities from around the world, companies, and suppliers is something Petrobras is used to doing, and it has been very fruitful.” Referring to the company’s presalt projects, she added, “With technology we have managed to produce 300,000 b/d in the region only seven years after its discovery.”

Guedes flagged technological advances driven specifically by the company’s presalt push, including progress in the development of advanced solutions in reservoir characterization, well drilling and completion technologies, underwater equipment systems, the integrity of facilities, and CO2 processing and treatment.

She added that joint industry projects such as DeepStar also were “very important” for the company’s strategic development of new technologies as these accelerated the finding of new solutions while reducing overall R&D costs.

Future Vision portfolio

The Procap Future Vision program currently has a portfolio of 19 projects, including work in the following areas:

A configurable FPSO vessel – a “FUTURE FPSO” unit that it describes as eventually having “plug-and-play” compact process equipment associated with subsea processing and power distribution;

The use of augmented reality and robotics that is being analyzed as a way to reduce the number of personnel offshore, enhancing safety and reducing logistical costs;

Laser drilling. Petrobras describes this as “a very promising area that, together with riserless drilling and the use of sensors to monitor the well integrity and optimize production, will significantly improve economics.”

Nanotechnologies such as developing nanostructured materials and nanosensors to assure system integrity and nanoparticles to improve recovery or to help gather reservoir information.

Petrobras believes the latter subject of smart nano-materials has great potential, with the company confident of improving the performance of chemicals already in use (polymers and surfactants) to make some procedures economically viable. Smart nanomaterials also are being developed to change rock wettability and interfacial tension between oil and water and to increase the viscosity of the injection fluid.

Also, a better understanding of rock-fluid interactions and properties using nanosensors could help better define an optimized recovery strategy. The development of contrast agents for imaging methods such as seismic and electromagnetics could help locate remaining residual oil.

Petrobras currently is carrying out a study evaluating the economic impact of the potential combined use of all those technologies on a presalt field offshore Brazil.

Subsea processing research

But much of the development focus within its Procap Future Vision program at present, like several of its peers, is on current and near-term projects within the fast-advancing subsea processing arena. This road map toward what would naturally result in the eventual elimination of surface platform facilities includes items such as more compact oil-water and gas-liquid separation systems, a multiphase pump with high differential pressure, and a gas compression system.

The main applications are on fields with a high gas and water ratio, on remote discoveries distant from producing facilities, and for increasing reservoir recovery rates from existing developments.

In terms of compact separation technology, Petrobras has been conducting several R&D initiatives for the last 10 years or so. Originally these initiatives were developed for topsides and onshore applications but always with eventual subsea deployment in mind.

It has evaluated the technology via several field tests, a recent example being the Marlim three-phase subsea oil-water separation system, a solution company officials describe as “a very significant example of compact subsea technology employment for a single producer well application.”

In the area of multiphase boosting for oil fields in remote locations, the company has invested significant sums on the development of twin screw and helico-axial concepts for multiphase pumps, targeting applications with required differential pressures up to 870 psi. Recent analysis has indicated that high differential-pressure subsea boosting (up to 2,175 psi) is economically and technically attractive for various scenarios, and because of that much R&D effort is being concentrated in further developing this technology.

Fabio Alves Albuquerque, an engineer in the subsea equipment technology sector at CENPES, spoke at OTC Brasil about the company’s current activities and future vision for subsea processing and boosting. He highlighted the pioneering recent use of electric submersible pumps (ESPs) in a boosting module on dummy wells in the ultradeepwater Jubarte and Golfinho fields offshore Brazil as well as using ESPs in a mudline skid on the Espadarte field offshore Brazil and the Cascade-Chinook field development in the US Gulf.

“As a field progresses, we get reservoir information along with the production and identify subsea processing opportunities,” he commented. This leads to initiatives such as a planned project for the use of a subsea high-pressure multiphase pump during 2014.

Albuquerque’s subsea colleague Cezar Paulo stressed the importance of ensuring that the company’s long-term R&D road map was integrated not only with its business plans but also aligned with the region’s presalt challenges, such as remoteness from shore, high-pressure reservoirs, and extreme water depths.

Statoil

Innovation is a machine that can be fussy or finely tuned. Fueled by the research and development of new ideas, innovation is the continuous process that can either make or break a company. Fortunately for Statoil, its home on the Norwegian Continental Shelf (NCS) provides the perfect proving grounds for pushing innovation’s limits in helping to stem the decline in production from the shelf’s maturing oil fields.

Norway’s oil production peaked in 2001 when the country produced 3.4 MMb/d of crude oil, according to the US Energy Information Administration. In 2011 that figure had dropped to 2 MMb/d.

Statoil is looking at ways to “enhance production beyond what we expected in the beginning,” said Lars Hoier, Statoil’s acting senior vice president of R&D and innovation.

He added that the expected oil recovery from company-operated fields on the NCS was initially around 30%. The current recovery rate is on average 50%, an increase he credited to significant technology development.

“For many years we have tested, adapted, and developed new technologies and implemented them into our fields,” he said. “In many ways we can say that the [NCS] has been our laboratory, meaning that we can test out many different ideas and then apply them globally.”

But the company is shooting for higher recovery rates. “Although we’re proud of 50%, we’re aiming for Statoiloperated fields in the NCS to have on average 60% recovery. This is world-leading,” he said. It is a goal that will be tough to meet, he said, adding that it will “require a number of technology developments and breakthroughs within selected areas in the future, including further development of a large range of IOR methods for what we call our IOR toolbox. And as we develop the technologies, we can tailor standardized solutions for different fields with that toolbox.”

Open to new ideas, partnerships

Realizing that solutions to complex problems like improving oil recovery reside both within the company and out, Statoil established the Innovation Portal. This online portal provides the public with a means to submit ideas or proposals for safer, better, and smarter solutions. Successful selection of an idea by the company could lead to further evaluation and possible codevelopment of the idea with Statoil.

“We post challenges within areas where we need new ideas, and we have received numerous responses,” Hoier said. “With Statoil Technology Invest we can go in and help facilitate growth for a number of companies, but we also have brought these ideas into the R&D organization for further development to implementation because innovation is not all. We talk a great deal about the idea part, but it’s also about how we do business with the idea before we implement it. I’m really proud of the innovation part. We see it more and more.”

In addition to the portal, the company also seeks out and supports development efforts in academia. In June Statoil signed a four-year framework agreement for R&D with the Institute Francais du Petrole Energies Nouvelles and a five-year academia agreement with Institute Francais du Petrole (IFP) School.

According to the school, the agreement covers research efforts in environmental technologies, petroleum geology and geophysics, enhanced petroleum recovery, drilling and intervention, processing and transport, deepwater and subsea production technologies, gas technologies, renewable energies, and more.

This collaboration with academia is the company’s third. It has similar agreements with the UK’s Imperial College and the University of Texas at Austin.

The academia agreement provides for Statoil’s support of the IFP School’s development and allows the Tuck Foundation to award Statoil-funded grants to students. Funding for up to eight scholarships in the IFP School exploration-production master’s program were to be provided by Statoil for the 2013 academic year, according to the school.

As the search for oil and gas moves into frontier regions, the need for technologies that can assist in the exploration and production of the resources is great. To help tackle this challenge, Statoil and NASA recently announced their partnership to explore how technologies and knowledge from the space and oil and gas industries can be relevant to one another. Statoil researchers will work with researchers from the Jet Propulsion Laboratory (JPL) located in Pasadena, Calif., the company said in an announcement.

“Searching for oil and gas resources has become so advanced technically over the past decade that new solutions and ideas are needed. To Statoil this is a significant opportunity to take technologies developed by NASA and JPL for the harsh and challenging environments of space and apply them to the equally demanding environments of oil and gas production,” Hoier said. “We’re excited to work with NASA – one of the leading research organizations globally – to evaluate the development and application of technologies that have more in common with outer space exploration than previously thought.”

Statoil is among the most technology-intensive major energy producers and annually spends $550 million on R&D and innovation. The agreement with NASA is complementary to the work Statoil already has under way, according to the announcement. The partnership is expected to run from 2013 to 2018 with the option of contract extension and will focus on supercomputing, materials, robotics, development of new tools, and communication optionality.

Recent Progress in the RPSEA Ultra-Deepwater Program

The Ultra-Deepwater Program at the Research Project to Secure Energy for America (RPSEA) has been busy managing a multitude of projects in its portfolio. Even as RPSEA continues to manage ongoing projects, its member subject matter experts are evaluating bids from the most recent round of requests for proposals.

By James M. Pappas, RPSEA Ultra-Deepwater Program

New projects

Some of the projects expected to begin soon are:

  • Marine sources for airgun substitution;
  • Pressure prediction and hazard avoidance through improved seismic imaging;
  • Subsea produced water sensor development;
  • Subsea DC connectors for environmentally safe and reliable powering of ultra-deepwater (UDW) subsea processing;
  • Development and qualification of a subsea produced water treatment system for UDW reinjection or subsea discharge;
  • Real-time acoustic oil-water separation in oil production;
  • Methodology and algorithm development for the evaluation of UDW or arctic floating platform performance under hazardous sea conditions;
  • Development of advanced computational fluid dynamics (CFD) tools for the enhanced prediction of explosion pressure development in early project phase and deflagration to detonation transition risk on US Gulf of Mexico (GoM) drilling and production facilities;
  • Reliability of annular pressure buildup mitigation technologies;
  • Development of best practices and risk mitigation measures for deepwater cementing in synthetic-and oil-based muds;
  • BOP shearing device technology development;
  • Early kick detection technology/demonstration;
  • Dynamic appraisal with significantly reduced environmental impact on drilling or completions; and
  • Ultra-deep in situ spectrographic and multiple physical sample capture system for autonomous underwater vehicles.

Final reports

Several milestone reports were completed in 2013, and final reports have been issued. Each of these studies can be found and downloaded online by project title at rpsea.org/projects/search/. The titles of the research projects and the lead researcher include:

  • “Geophysical modeling for studying acquisition and processing methods in the deepwater GoM,” SEAM;
  • “Displacement and mixing in subsea jumpers experimental data and CFD simulations,” University of Tulsa;
  • “Intelligent production system for UDW with short hop wireless power and wireless data transfer for lateral production control and optimization,” Tubel;
  • “Gyroscope guidance sensor for UDW applications,” Laserlith Corp.;
  • “Phase I: Corrosion and scale at extreme temperature and pressure,” Brine Chemistry Solutions;
  • “Phase I: 10121-4302-01, Ultra-high conductivity umbilicals: Polymer nanotube umbilicals,” Nanoridge;
  • “Phase I: More improvements to deepwater sub-sea measurement,” Letton-Hall Group;
  • “Phase I: Qualification of Flexible Fiber-reinforced Pipe for 10,000-ft Water Depths,” GE Global Research;
  • “Phase I: Qualification of Flexible Fiber-reinforced Pipe for 10,000-ft Water Depths,” Deepflex;
  • “Phase I Progress: Smart cementing materials and drilling muds for real-time monitoring of deepwater wellbore enhancement,” University of Houston;
  • “Phase I Interim: Deepwater Reverse-Circulation Primary Cementing,” CSI;
  • “Phase I: Coiled-tubing drilling and intervention system using cost-effective vessel,” Nautilus; and
  • “Phase I: Operational Concept and Requirements, Autonomous Underwater Inspection Using a 3-D Laser” and “Phase III Report: Lab Simulation Demonstration,” Lockheed Martin MST.