Major Oil and Gas Survey Assess Impact of Innovation and Investment in America, Europe and Asia

Global research from Lloyd’s Register Energy confirms the priorities up to 2025

In the latest industry opinion survey, Lloyd’s Register Energy, the leading compliance, risk and technical consultancy services group, has today released its findings from a major oil and gas survey conducted to assess the impact of innovation and investment by operators in America, Europe and Asia.

The Technology Radar survey, launched at the start of the year, takes the pulse of technical innovation in the sector and looks ahead to the future investment drivers. It revealed the investment drives to be:

• Safety improvements (45%)
• Improving operational efficiency (44%)
• Reducing costs (43%)
• Accessing new reserves (29%)
• Increasing asset lifespan (27%)

Lead participants in the survey include commentary from UK Onshore Operations Group, Woodside Energy, Enertech, Maersk Drilling, TouGas Oilfield Solutions, Horton Wison Deepwater, Royal Dutch Shell, GE Oil & Gas, and also Douglas-Westwood, National Energy Technology Laboratory (US), and the Institute for the Analysis of Global Security.

The Technology Radar survey is one of the largest polls on the issue of technology and innovation in the oil and gas industry. It takes in to account respondent’s opinions and their business strategies in the near term (before 2020); the medium term (the years before and after 2020); and the longer term (from 2025 and beyond), and is based on five research questions:

1. Which technologies are likely to have the biggest impact in the next decade?
2. How are technical developments addressing the challenges the sector faces?
3. What are the drivers and barriers to innovation?
4. What patterns of innovation adoption can be identified?
5. Which types of organisations are leading the way?

The key findings of the survey include:

1. innovation is drawing on a range of technologies, rather than any single breakthrough
2. a variety of technologies looks set to have a high impact in the coming years relating to extending the life of existing assets — enhanced oil and gas recovery (EOR)
3. Near-term impact – automation — remote and subsea operation is identified as firms seek to cope with challenging environments
4. High-pressure, high-temperature (HPHT) drilling and multi-stage fracking are also expected to have a major impact, but are expected to be fully deployed from 2020
5. 73% surveyed believe that the rate of innovation in the sector is increasing
6. 68% intend to increase their R&D budgets in the next two years
7. 58% agree that future breakthroughs involve ‘bits and bytes’, rather than physical hardware
8. In the last 2 years, 46% of breakthroughs have been driven by International oil Companies and 31% by Exploration & Production Companies
9. In the next 2 years, two-thirds surveyed expect NOCs to increase their spend on R&D significantly, supporting their drive for greater international growth – and increasingly operating like IOCs.
10. Continued risk aversion in the sector, especially in the deployment of new technologies, is however, a major brake on innovation. Only one quarter of oil and gas companies consider themselves to be early adopters.
11. Given the link between innovation and competitive advantage, in the last 2 years, in-house research has been the most widespread approach to developing innovation (cited by 59%). Joint ventures with external partners are set to become more common.

Commenting on the findings, John Wishart, Director of Lloyd’s Register Energy, said:

“This 2014 Lloyd’s Register Energy Technology Radar synthesises the oil and gas sector’s view of which technologies harbour the greatest potential beneficial impact, and when that technology is likely to go mainstream.

“Through in-depth interviews and supported by a survey of more than 250 sector professionals, we have developed a clear and illustrative overview. Given the vast range of innovation underway, this study focuses on 25 specific technologies; technologies that help extend the life of current assets, or improve uptime and efficiency, are setting the greatest prioritisation today.

“In the near term, automation and EOR are expected to have the greatest impact on the sector; in the medium term, it is high-pressure, high-temperature drilling and multi-stage hydraulic fracturing; from 2025 and beyond, subsea robotics is seen as most promising.

“This research provides evidence from which we can better understand and explain the trends which we are beginning to see across the oil and gas industry. The Technology Radar survey is one of the largest and latest independent polls on the issue of technology and innovation in the oil and gas industry.

“Through this independent survey we are sharing to a global industry the views from industry, and we believe the results will help to guide future energy policy and the development of industry growth plans. With rising energy costs, the oil and gas sector will benefit from a clearer understanding of the potential innovation scenarios to meet future energy demands and providing robust energy supply.

“Initiatives that nurture technical innovation can no longer be an afterthought for business or government; they must be central to any organisation’s strategy for sustainable growth and leadership. They are central to our growth too. Adapting that sort of thinking into what we do is going to be a very interesting part of how we move forward. We are driving the development of new concepts and technologies through collaborative R&D, and our focus is firmly on innovation – to benefit our clients and society’s future.”