Operational efficiency is now top driver for innovation investment
As the sector becomes increasingly digitised, new skills are needed, which are often in very short supply - if available at all. At the same time older installations, often customised over the years, rely on the local knowledge of long- term staffers, the majority of which are approaching retirement.
Further, the harsh environments to which many operations are subject amplify the risk to life and the environment; growing threats of cyber- attacks have yet to be adequately mitigated within the sector; the regulatory environment is increasingly stringent and complex; and costs associated with R& D and operations continue to climb.
All of this is set against a backdrop of global climate change, which demands urgent and dramatic action to reduce carbon emissions, whilst maintaining secure and economic energy supplies to global communities.
There are no easy solutions to any of these problems, but each one stimulates an imperative for innovation. According to Lloyd’s Register
Energy, “Operational efficiency” is now the top driver for innovation investment, narrowly overtaking “Safety”, which topped the list in the 2014 survey. To Duco de Haan, commercial development director at the firm, this is unsurprising. He said: “When the business has exhausted all the options to take out cost, technology is the only thing that can make quantum leaps in cost reduction.”
In addition, to nudging down the bottom line, companies are also looking to push up the top line by extracting maximum value from resources with “Improving access to potential reserves” and “Increasing the life span of assets” rating more highly as innovation drivers in 2015 than in 2014.
From a technology standpoint, respondents identified a number of investment priorities, including enhanced oil recovery ( EOR), unmanned aerial vehicles ( UAVs) and standardisation of oil fields – all of which occupy a legitimate position on a cost- reduction agenda. That said, industry executives have not disregarded the need to find new sources, evidenced by the top three ranking “Improve access to potential reserves”.