It seems difficult now to imagine that during the 2014 CERA Week in Houston, the biggest concern was that, with E&P costs growing, $100/bbl oil was the breakeven point for new field development projects. Today oil is half that price. But we still need to deliver the 90 MMbbl/d of oil and the 10 MMcm (350 MMcf) of gas needed by the 7.2 billion people on our planet. And we need to do it more safely, economically, efficiently and sustainably.

We can no longer compete—or, in some cases even survive—doing business as usual. The time for incremental change is past. We need something disruptive—a totally new way of looking at problems and developing and executing commercial solutions.

Innovation is the process by which an idea or invention is translated into a marketable good or service. For our industry, that means it must improve reliability and efficiency, optimize production and increase ultimate recovery. It also must be tied to customer needs, be economically sound and be built on viable technology. This type of innovation cannot take place in a vacuum—or a single laboratory. It requires working across multiple disciplines, multiple companies, multiple geographies and cultures, and multiple industries. And it requires openness to diverse ideas, thoughts and methods.

The only way we can achieve these changes is to work together seamlessly. Through collaboration we can implement change more rapidly and effectively, and we can shorten the cycle time for acceptance of new technologies and methods.

Ideas that spawn innovation can change the game across the board, from exploration to abandonment. They can come from anywhere, from aerospace to medicine to academia. They just need to be fit-for-purpose.

Neither seismic nor information technology originated in the oil and gas industry, but through inter-industry collaboration, our industry became a huge consumer—and innovator—of both. The same is true of Big Data and the Internet of Things. Collaboration with consortia, universities and labs has led to the development and commercialization of geological modeling and reservoir simulation software that delivers more accurate models and guided workflows faster from “lighter” applications that consume less server space. Collaborating on Big Data analytics and the Internet of Things is driving innovation in real-time operations to reduce complexity and optimize drilling performance, production management and well control.

The same is true of materials science, including nanotechnology. Our industry relies heavily on academia for understanding and technology development. The development, characterization, modeling and simulation of fluid systems, metallurgy and sealing materials that can reliably withstand increasingly harsh downhole environments are examples of ongoing research that will remain a strategic priority, gaining commercial importance as conventional energy resources are consumed. Our industry must lead the development of new ultrahigh-performance metal alloys, sealing materials and systems to meet the world’s future demand for energy while continuously improving reliability and efficiency of oil and gas recovery from less demanding environments. Both of these tasks require the sustained ability for industry leaders, engineers, scientists and academicians to collaborate to innovate unceasingly.

Change is difficult to accept. Can we establish a culture within our industry to embrace new ways of working together?

Houston’s “Pumps & Pipes” is an idea and technology exchange program that leverages the local brain trusts in oil and gas, medicine and aerospace to encourage innovation among all three industries. Similar programs are springing up throughout the world.

Our industry faces more complex challenges now than at any time in our history. Looking forward, a few critical factors will make or break our endeavors.
• Technology we don’t know about yet;
• On-time delivery of critical equipment;
• Trained, certified and competent people—not only in disciplines and product lines but also in cultures of safety, certification and compliance; and
• Collaboration.

Innovation drove the production successes that led to the current market situation. Innovation also will pull us out of this situation stronger than before. Given the unknowns ahead, it makes sense for us to team up, apply our own respective strengths and cross frontiers together.

Comments