OSLO, Norway—Operational efficiency is the watchword for E&P within the current low oil price scenario, and at the heart of this is innovation. That’s why Statoil established Statoil Technology Invest (STI) to support small and medium enterprises with new technologies.

As a company, Statoil’s annual research budget is $300 million, and half of that is managed by STI. Managing Director Kristin Aamodt manages that budget. She sat down with EPmag.com at the company’s Oslo office to discuss the strategy of fostering operation efficiency and its use of suppliers.

“The industry is changing, as we all know,” said Aamodt, a 14-year veteran of the oil, energy, biotech and venture industries. “It’s in transformation and we need to adapt to that. Within Statoil, we've already done a very good job in cutting costs. We've saved $3.2 billion annually compared to 2014. But we need new technology and innovation to fuel the radical changes.

“This fits very well with Statoil because we have always been a technology-driven company. It's in our backbone to use technology,” she continued. “In 2017, our budget for research and technology is $300 million, and our ambition is to use half of that externally in collaboration with external companies, with universities, with research institutions, to get new technology brought forward.”

This is where STI come into play. As Aamodt explains, it focuses on the small- and medium-size companies because the best ideas don’t always come from the big, established suppliers.

“Very often, we see great ideas coming from small startup companies, and it's hard for these small companies to become a supplier to Statoil, or to any other huge oil company,” she said. “That's why you need people like us believing in the technology, believing in the entrepreneurs, and seeing the potential and helping these companies grow so they can really establish supply to Statoil.”

Aamodt explains that STI has three main activities. The first one is to find, invest in and build the startups.

“We find the entrepreneurs in the small companies with the really good ideas,” she said. “We go in with capital and competence, and take an active part in the board. Then we spend a lot of time on implementing the technology in Statoil. And it's here we see the greatest value in what we do for Statoil as a company, getting these technologies in use for Statoil. That's where we can save a lot of money in our operations.”

STI provides equity or project-based funding with varying levels of maturity divided into three phases. The LOOP program provides project funding and access to technical expertise and pilots without taking ownership, while seed funding and venture capital both involve STI paying for an ownership stake in a company.

When the company has matured and becomes an established supplier, STI typically seeks to sell out and maintain the position as a technology user. It will continue using the technology, but the supplier will be treated like any other supplier Statoil uses in its operations.

The targets are innovative, high-impact, upstream technology companies. A recent success was Sekal, an advanced software tool for monitoring and trend analysis during drilling operations. It creates a dynamic, real-time picture of the entire wellbore with changes between the model and reality visualized as trends graphs. This helps drilling analysts and engineers to optimize operational performance and to proactively avoid problems in the borehole.

Another recent partner was Raptor Oil, which used proven proprietary signal processing technology to deliver an intelligent bidirectional wireless communication system with low latency and high data rate transmission capabilities to deliver high-value data into and out of the wellbore.

Fishbones is another example. “This is a unique stimulation technology for low-producing wells,” Aamodt said. “The technology is hundreds of needles that go out from the main wellbore and stimulate production. By using this technology, you can stimulate low-producing or non-producing wells to produce better. This has been proven in various sites around the world. We see some wells that were not producing that started producing with this technology.

“Then we have Eelume, a disruptive technology for subsea inspection and light interventions. A snake robot, as we call it. Instead of going down to a subsea well with a costly ROV, you can do an inspection and light repairs with the snake. In our operations, half the vessel bases we use are typically easy, light jobs so that you can respond quicker, reduce downtime, do it more cost efficiently. It gives much more flexibility when you look at building new subsea solutions that you have this flexible snake.”

Aamodt explained that not all investments go this well. “Overall, that's kind of our ambition--to provide solid implementation value and, at the same time, provide solid financial return. We have a very good financial return history on our portfolio. We're pretty happy for this troubling time that we're in right now. Over the years, we have proven to provide some really good financial returns on the capital employed, as well.”