How to achieve technology innovation in the oil and gas industry

Many industries have exploited the exciting opportunities to create new products and markets, but the oil and gas sector has lagged behind and has resulted in the oil and gas industry failing to exploit the potential of new technologies

The oil and gas industry is now at a pivotal point in its evolution and we are now on the cusp of a transformation. The rise of new technologies, coupled with the ongoing global push for a reduced environmental impact, is altering the industry. Organisations across the sector face growing pressure to streamline their operations in order to improve overall efficiency and unlock additional barrels of oil to maximize revenue.

Despite these new hurdles, the oil and gas sector has been generally very slow compared to other industries when it comes to leveraging the potential of new technologies to innovate and optimize the performance of its systems. While companies have tackled the lower oil price with positive actions to reduce environmental impact, lower operating costs and increase efficiency, these gains must now be made sustainable, Therefore, we must truly transform the way we work.

See also: How can drones power the offshore oil and gas operations?

In light of these challenges, it is now vital that players, both new and old, fully embrace the potential of new solutions to kickstart the sector’s technological revolution and achieve the higher level of stability it desperately needs. Research conducted by McKinsey & Company found that the effective use of digital technologies across the industry could lower capital expenditures by up to 20%, reduce operating costs in upstream by 3 to 5% and by about half that that in downstream, demonstrating the clear cost-savings opportunities and efficiency to be had.

Investment in today’s visionaries for tomorrow

With new technologies emerging every day, many with the same promise of reducing costs and optimizing a business’ performance, ways to achieve technological advancement across the industry are now in abundance and oil executives must consider how best to accelerate this innovation to ensure its continued success on a global scale.

At the core of most of today’s technological innovation is either a desire or need to solve a particular problem. This way of thinking is often demonstrated best by those with a different vision of the industry’s future, who are able to identify the areas needing improvement and develop new solutions accordingly. The current oil and gas sector is no exception, and we are now seeing a rapid increase in the number of emerging oil and gas startups looking to move the industry away from its traditional practices and towards a new and more efficient way of operating.

In an industry where innovation is now the key to sustainability, the ‘if it isn’t broke, don’t fix it’ approach to development will no longer suffice. Larger companies must refocus much of their investment on the smaller, more ambitious technology developers to ensure revolutionary solutions enter the oil and gas market faster and enable them to prepare their existing solutions for success within a new era of innovation.

See also: 3 industries saving billions with cognitive machine learning

Accelerating changes to how we work and embracing new technologies will, therefore, be at the heart of the industry’s transformation; improving productivity, increasing efficiency and creating well-paid jobs. That said, it still vital that companies continue to balance this level of innovation with their existing knowledge of best practice for oil and gas organizations, to ensure a consistent position within the industry of both today and tomorrow.

One particular concept we have seen emerge across the oil and gas industry within the last decade is the digital oilfield, which refers to the real-time automation of operations through a combination of business process management systems and complex information technology, to ensure the simple management and tracking of the data. This has presented oil and gas companies with one way to streamline systems and achieve technology innovation, however, a greater investment in startups could see many other opportunities come to fruition. This means we must have a technology vision for the industry and a future where remote operations and automation are the norm.

Embracing a collaborative approach

One of the biggest challenges for oil and gas companies when achieving this degree of innovation on an industry-wide scale is finding the best way to integrate ground-breaking, new technologies. Embracing a more collaborative amongst new entrants and existing players is essential for streamlining the oil and gas landscape, reducing costs and overcoming the current lack of widespread technological development across the sector.

Partnered with a clear strategy for implementing this innovation across their business model, a greater convergence between the old and new will ensure companies are taking the best solutions from across the industry, not only to achieve innovation but to also give them a greater competitive edge within an increasingly in-demand and saturated market. This will require the industry, technology providers, government, regulators all working in partnership to deliver the technology transformation.

See also: Embracing hybrid cloud services in traditional industries

This kind of approach can provide huge benefits for all involved. For startups looking to enter the space, it can help them to connect with major investors and bring their solutions to market quickly and successfully as a result of increased investment, facilities, and resources. For the larger companies looking to invest in technology-driven solutions, this can help to change their outlook on their existing infrastructure and help to fill any technology gaps with revolutionary companies and products.

Oil and gas technology has not yet been at the forefront of the global innovation agenda, yet with demand for these services increasing every day, it is becoming increasingly ranked as a priority for change in many countries worldwide. It is now time to fully kick-start the industry’s technological revolution and the key to achieving this lies within the hundreds of emerging solutions being created by developers striving for sustainability and efficiency.

 

Originally published on Information Age 

Sourced by David Millar, TechX director, the Oil & Gas Technology Centre

OGCI Invests in a Diverse Set of Technologies Designed to Reduce Emissions

The Oil and Gas Climate Initiative is advancing efforts to develop and commercialize technologies that reduce greenhouse gas emissions in some unexpected areas.

The voluntary organization of 10 major international oil and gas producers has finalized the first three investments of its billion-dollar investment fund, OGCI Climate Investments, to fund three low-emission technology projects.

The projects, the first in a host of planned investments, seek to make more efficient engines, reduce the environmental impacts of cement, and demonstrate the commercial viability of carbon capture and storage at a gas-fired power plant.

“OGCI Climate Investments’ goal is to deliver GHG reductions by investing in pre-commercial technologies and solutions that are both cost-effective and will scale globally,” explained OGCI Climate Investments Chief Executive Officer Pratima Rangarajan.

The group also has the unique ability to deploy the technologies in the operations of its member companies to amplify the scale an impact of its initial investments.

Promising technologies

The investments include US-based cement and concrete production company Solidia Technologies, which has patented a technology that facilitates the production of cement in a way that generates fewer emissions and uses CO2 rather than water to cure concrete.

OGCI says Solidia’s technology has the potential to lower the carbon footprint of concrete by up to 70% and water consumption by up to 80%. The project is also expected to demonstrate how carbon dioxide can be commercially re-used in an environmentally sound way.

In the OGCI report Catalyst for Change, the organization notes that the conversion of captured carbon dioxide into useable products can help reduce greenhouse gas emissions in specific sectors. In fact, the report notes that OGCI is looking to “invest in a range of companies that have developed innovative and commercially viable carbon utilization technologies.”

Another recipient of OGCI funding is Achates Power, a company that is developing high-efficiency opposed-piston engines that have the potential to reduce the greenhouse gas emissions produced by vehicles.  Achates Power plans to use the funds to accelerate the deployment of its technology across the globe alongside a broad consortium of engine makers.

The third project aims to design the world’s first full-scale natural gas power plant with carbon capture and storage, including industrial CO2 sequestration capability. OGCI Climate Investments has acquired the concept for a project in the UK and plans to work with the project team on a commercially viable concept and basic engineering design that can receive government support and attract private sector investors.

The project would also “enable neighboring energy-intensive industries to leverage the carbon dioxide transport and storage network that would be developed. This way, they too would be able to eliminate a large share of carbon dioxide from their operations,” OGCI said it its report.

The project could also advance the UK’s plans to reduce its greenhouse gas emissions to 80% of baseline 1990 levels by 2050.

The driving force behind OGCI

Together, OGCI’s 10 member companies claim to account for more than one-fourth of global oil and gas production. Their efforts demonstrate a commitment by these top producers – which include several national oil companies – to lessen the environmental impact of fossil fuels and collaborate on actions to reduce emissions.

The roster of members includes BP, China National Petroleum Corp., Eni, Pemex, Repsol, Saudi Aramco, Shell, Statoil and Total. An eleventh member, Brazil’s Petrobras, is set to formally join the group soon.

By collaborating thorough OGCI, the producers aim to be a catalyst for across the oil and gas industry and beyond. Since they produce so much of the world’s energy, the report says that makes them “important players in ensuring the supply of reliable and affordable energy, and gives us the opportunity to advance the transition to a low-emissions future.”

Good Vibrations: How Upending Convention Led to a Game-Changing Drilling Innovation

This article is reprinted with permission from ExxonMobil. 

In 2009, ExxonMobil engineers drilling into deep offshore oil deposits in the Gulf of Mexico unexpectedly encountered a particularly hard and abrasive rock formation. Instead of taking the drill bit half a day to drill through this formation, it ultimately took four runs, or trips in and out of the hole, and three weeks.

Yet just four years later, engineers were able to drill through the same formation in only one run and about a day.

The difference? An innovative approach to drilling that turned conventional industry wisdom on its head and is now reducing time, money and the environmental impact of oil and gas exploration and development.

For nearly a century, drilling engineers grappled with the challenges associated with vibrations along the drill string, which connects the drill bit to the rig at the surface. As the drill bit penetrates rock, the incredible force exerted on the system can cause the drill string to vibrate violently, which sometimes causes the tool to stop drilling, losing precious time.

The traditional approach to researching this problem was to focus on extreme scenarios. Scientists believed that by analyzing the large shocks and intense vibrations associated with extreme events, they would be able to figure out how to minimize damage. However, a team of ExxonMobil engineers and scientists broke new ground by upending that convention, convinced that the solution would come from preventing large vibrations from ever getting started in the first place. Instead of focusing on large vibration events, they developed drilling processes to mitigate vibrations when they are still small and manageable.

ExxonMobil engineers now tune the bottom part of the drill string, known as the bottom hole assembly, using proprietary modeling technology. Jeffrey Bailey, drilling mechanics advisor with ExxonMobil Development Company, compares the upgrade to making music.

ExxonMobil researchers Vishwas Paul Gupta, Jeffrey Bailey, Erika A.O. Biediger and M. Deniz Ertas at the Edison Award ceremony in 2015.

ExxonMobil researchers Vishwas Paul Gupta, Jeffrey Bailey, Erika A.O. Biediger and M. Deniz Ertas at the Edison Award ceremony in 2015. Photo via ExxonMobil.

“We now approach bottom hole assembly design in an analogous way to playing a stringed instrument,” he said.

“We now approach bottom hole assembly design in an analogous way to playing a stringed instrument,” he said. “If we need to modify the design to run at a higher rotational speed, then we shorten the length of the pipe between contact points, just as a musician moves his or her finger closer to the bridge to play a higher note.”

The research team also figured out how to identify and measure vibrations happening at the drill bit, using only measurements recorded by the rig equipment at the surface. This method is applicable to every well that we drill, is less expensive than measurements recorded at the bit, provides real-time data, and enables further optimization methods. The patent describing this methodology was recognized with an Edison Patent Award in 2015 by the Research & Development Council of New Jersey.

Bailey and his colleague Deniz Ertas aren’t new to drilling vibrations. They first developed the models that helped inform their winning approach to vibration mitigation two decades ago. Today that patient research is steadily proving its effectiveness in places like Qatar, Abu Dhabi and the Gulf of Mexico. The technology is also helping drillers reach incredible depths. In 2015, ExxonMobil and its partners drilled a 13,500 meter extended-reach well at the Chayvo field, which lies in Pacific Ocean waters off the eastern coastline of Russia’s Sakhalin Island.

“It took several years to build up to the point where we have the amount of confidence in the method that we do today,” said Bailey. “It’s just been a matter of conviction that the technology works and then persistence and seeing it to completion.”

 

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