OGIC observes increased confidence in North Sea emerging technologies

Over the past year, the Oil & Gas Innovation Centre (OGIC) has seen a growing appetite from companies looking to invest in the development of emerging technologies, as North Sea operators continue to demonstrate the benefits of technology-led solutions in response to the economic downturn.

Access to advanced technology has always played a vital role in driving the oil and gas sector forward. However, the risks and uncertainties associated with bringing a new technology to market require significant financial investment to research, develop, test, and commercialise a new concept. With higher levels of investment typically required in the early stages of research and testing, companies are often deterred from exploring advanced technology solutions.

In times of economic adversity, companies become more risk adverse in their efforts to find cost savings and operate with even greater efficiency to survive. During this process, reducing research and development (R&D) budgets is often seen as a quick way to cut costs. However, for a mature basin like the North Sea, withdrawing this investment can increase the risk of the UK industry falling behind global competitors, especially in the technology arena.

In the last year, new technologies have presented opportunities to solve on-going challenges facing the sector, both now and in the longer term. Accessibility to adapted solutions that combine existing technologies is being accelerated by the advancement of Internet of Things (IoT) and 4G offshore, which is opening up new opportunities to capitalise on the potential of emerging technologies.

Companies are now reappraising levels of research and development investment to provide a competitive advantage. This includes cost-effective ways to approach and manage decommissioning, which is forecast to take place on 349 fields across the four regions of the North Sea over the next decade¹.

Ian Phillips, chief executive of OGIC commented: “At OGIC, we are focussed on encouraging early stage R&D investment in technologies with a real potential to solve some key industry challenges. By helping companies find appropriate research expertise within the Scottish university system, in addition to funding, companies are now benefiting from working hand-in-hand with cutting edge research departments, such as Oceans Systems Laboratory at Heriot-Watt University and the Petroleum Engineering Research Group at Robert Gordon University.

“We believe that providing access to more cost effective early stage research, often on unproven technologies when there’s a higher risk of the concept not working, is helping to stimulate ideas for more innovative solutions – especially as the “regret cost” is significantly reduced if it fails. As a direct result, we are seeing a notable increase in projects with more advanced technology applications, with several of our collaborative projects gaining further investment and industry support based on the results of the early stage research. This increased activity is being driven by the partnerships being established with academia in Scottish universities, as well as a growing appetite to explore the potential of emerging technologies for the North Sea.”

By close of 2017, OGIC’s total investment in collaborative projects stood at £2.3m, and additional private sector funding across these projects brought the total value to £5.4m. Following initial activities with OGIC, several of these projects have moved on to the Oil & Gas Technology Centre (OGTC) for further development and field testing. This industry collaboration and investment has continued into the new year. By the end of January 2018, OGIC had signed four new projects and continues to receive a wide range of applications – many of which are focused on innovative technologies that have enormous potential to support industry ambitions to capitalise on the next phase of economic recovery.

Commenting on the importance of on-going investment in emerging technologies, Ian Phillips said: “The North Sea has a reputation as a centre for excellence and we have to ensure that we stay ahead and continue to lead the way with new and adaptive technology. Our ability to remain truly innovative and drive the sector forward will be greatly dependent on the appetite to invest in new technologies, rather than wait to see what others do – especially our global counterparts.

“Whilst OGIC is helping to identify and support technology developers, from small-scale innovators to major contractors, companies within the sector will, more often than not, be the catalyst for this innovation. This is also true for many sectors outside of oil and gas, and great benefits and ideas can be found from observing other sectors around us.

“To accelerate the process of bringing a project from idea to market, we need to continue to work together as a sector and utilise all the tools and resources currently available to companies active within the UKCS. At OGIC, we are already demonstrating what is possible when companies, academia, and business leaders in the industry come together to explore new innovations and technologies. With increased collaboration and willingness to use resources to trial new technologies more cost effectively and safely, the UK oil and gas sector will be in an even stronger position to take advantage of advanced technologies and continue to maintain its competitive advantage on a global scale.”

Ian Phillips, chief executive of OGIC

Ian Phillips, chief executive of OGIC

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