Examining Common Cross Industry Technology Challenges

posted 30 Oct 2014

After recently making a career transition to the oil and gas sector, I have quickly come to realise that there are many parallels between my experience of the military application of technology and the technology issues facing my new industry.

Much of the North Sea’s infrastructure is ageing and decommissioning is becoming an increasingly important issue for many operators. Similarly, the aircraft I operated was over 40 years old and its initial requirement had been laid down in the Cold War era; extending its life and viability became an almost continuous process.  The oil and gas industry can have similarly long development times and high up front costs; there is an economic imperative to make assets last as long as possible. This has led to the operators in the North Sea being forced to seek answers to similar questions faced by defence; how can we extend the life of old assets safely? Is it financially viable to do so? Can equipment designed for a different context in a different era be effectively modified to meet the challenges of today (incorporation of EOR technologies in brownfield developments with high water cuts, increasingly remote wells etc.)?

This brings me onto my next area of commonality; costs and the need to reduce them. The need to cut defence costs has been a widely publicised issue in recent years in parallel with the North Sea oil and gas sector. Spiralling technology costs in military aviation led to the creation of the tongue in cheek ‘Augustine’s laws’. Most quoted is law 16, which shows that while defence budgets grow linearly the unit cost of a new fighter aircraft grows exponentially; this means that in theory by 2054 the entire defence budget of the US will purchase just one fighter aircraft.

I’m not sure oil and gas faces a similar bleak outlook in terms of technology costs but there may be parallels. For example, in my view defence vendors had become focused on developing bespoke, high-end, world beating (gold-plated) products. I found that most front line personnel would choose to have a reliable, capable solution that can be easily and quickly brought into service rather than the sometimes overly complex (and expensive) solutions defence vendors are keen to market, and governments are keen to buy. Similarly the subsea systems market is populated by vendors offering highly engineered systems (in common with aviation, reliability and safety is key in the subsea environment) which are often bespoke, and have high capital costs.

A recent ITF workshop on subsea processing identified high costs as one of the potential barriers to the wider industry uptake of subsea processing technologies. Both operators and vendors have now accrued significant amounts of operational experience in the design and deployment of subsea processing technologies, often in deep-water environments. This could be used to lever the development of the next generation of subsea processing equipment focusing on lower cost, less bespoke systems, which still deliver safely and reliably. Such an evolution of subsea processing technology could make its use more economically viable in shallow water, mature basin applications.

Of course at their core each sector is completely different. It could be argued that defence is a ‘long game’; conflict and war will always exist.

Such certainty does not exist with respect to reserves in the North Sea and the clock is counting down. Perhaps now is the time to re-evaluate the industry’s approach to bringing innovative technology into the operational environment. Technology enhancements, and safely increasing the speed at which new technology is brought into service, will become ever more critical in increasing reservoir recovery rates. 

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