A more holistic approach to oilfield technology development

16 June, 2017

OTM’s Mike Sequeira, along with co-authors Hani Elshahawi from Shell International E&P Inc and Laurence Ormerod from Ormerod Consulting Ltd, recently presented a paper at the Offshore Technology Conference 2017 discussing the need for a more holistic approach to oilfield technology development.

The latest oil industry downturn has had a dramatic impact on innovation in the oil and gas industry. Staff and budgets have been cut dramatically, large field developments have been deferred, and new technology initiatives have been severely cut or entirely cancelled. As a result, most oil and gas companies and their supply chain have radically downsized. Some have simply right-sized, and others have completely capsized. Finally, new oil & gas discoveries around the world dropped the last couple of years to their lowest levels since the 1940s after companies sharply cut back in their search for new resources amid falling oil prices. This makes offsetting natural depletion of existing fields even more challenging and can lead to potential supply shortages by the end of the decade. This type of implosion is symptomatic of dramatic commodity price collapses. Remaining competitive in this challenging environment requires a more strategic and holistic approach to oilfield technology development.

Experience shows that the vast majority of R&D and technology initiatives fail to reach commercial deployment. Success is often measured as the ability to progress through a mostly technical stage-gating process, with little consideration given to the commercial validity of continuing to invest time and resource. This results in far too many projects tenaciously marching into the classic “Valley of Death” - the virtual chasm that separates innovation from commercial demonstration. Yet technology and innovation will still be needed to safely find, develop and operate especially with the operating conditions and overall business environment becoming ever more challenging. Service companies must also remain technically and commercially competitive as a matter of urgency, if not survival. Thus, while technology leaders must be prepared to intervene by cutting, stopping, or divesting programs that are off track, they must also continue to replenish and rationalize their technology portfolios to differentiate their companies.

The approach described in this paper takes a holistic view of technology maturation which addresses both technical and non-technical risks, which is by design more concurrent than serial. The definition of success is expanded to include the establishment of successful, commercially viable, and sustainable solutions that meet end user needs and requirements. Improving the efficiency and effectiveness of technology development and investing smarter allows operators and service providers to leverage new technologies to address existing and evolving challenges and to remain competitive now and in the future.

The full paper has been published by the Society of Petroleum Engineers / Offshore Technology Conference and is available via the OnePetro platform.

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