Oil & gas: technology and teamwork must reign supreme

The UK’s oil and gas industry is very much a tale of two halves. Look onshore and you’ll see a burgeoning shale oil and gas industry starting to gather pace.

Indeed, local councils in England are beginning to permit shale exploration once again, such as was seen in North Yorkshire during May. This could pave the way for companies — and the UK government — to capitalise on a new cash-rich industry.

That is in spite of the Scottish parliament voting to effectively ban fracking in the country last month.

But aside from political pressures, fracking will have to overcome a number of issues that only more advanced technology can solve if it is to really get off the ground.

Commercial break

If these technologies are successfully deployed, the process will become far more commercially viable, says Corin Taylor, a senior adviser at industry trade body UK Onshore Oil and Gas (UKOOG).

He says research and development (R&D), at places such as the University of Strathclyde’s UK Centre for Hydraulic Fracturing Equipment, will play a vital role as the fracking industry attempts to improve its commercial prospects.

A large part of the R&D undertaken at the centre will involve the development of more environmentally-friendly technology.

“It’s all about continuous improvement,” Taylor says. “Sometimes you get a big breakthrough that changes everything, but a lot of the work needed will involve gradually getting better and cleaner equipment. That’s the direction industry will take as it moves into the production phase.”

Better, more efficient technology will help the industry become more viable and more commercially acceptable, which will create more jobs

Corin Taylor, senior adviser at UK Onshore Oil and Gas (UKOOG)

According to Taylor, fracking firms will also seek process improvements via the use of real-time data tools.

It is a tactic borrowed from North America, which already boasts a fully-operational shale production industry.

“A lot of US operators put fibre optics down their wells, which gives them far more data about the fracking process.”

He says that access to more data will allow UK firms to understand a lot more about how their wells perform and where improvements can be made.

“This will be very important for the UK because it will allow us to target fracks more precisely, which will ultimately allow us to extract oil and gas more efficiently.”

Taylor also says the development of better technology will be a catalyst for job creation.

“Better, more efficient technology will help the industry become more viable and more commercially acceptable, which will create more jobs.

“We will be hiring new people and giving them new prospects and new careers, but some of the jobs will go to engineers from the offshore industry because they have the right skills.”

Offshore perspective

Taylor stresses that the onshore industry is not simply waiting to pick the bones of its offshore counterpart, but if you cast your eyes toward the North Sea, the picture is far from clear cut.

A recent report indicated that offshore operators might need to buck up their ideas if the industry is to survive.

Commenting in Lockheed Martin’s Asset Integrity Theme Landscaping study, Paul White, industry co-chairman of the MER UK Technology Leadership Board, says: “The development of technology and its implementation play a key role in efforts to maximise economic recovery from the UK Continental Shelf (UKCS) where billions of barrels of oil and gas remain to be recovered.”

He adds: “Techniques that help the industry to improve asset integrity and safely extend the operating lives of oil and gas fields can significantly contribute to the sector’s drive to increase the production efficiency of existing fields.”

The study, which has been commissioned on behalf of MER UK, has two major focus areas: technologies that are designed to improve the inspection of pressurised systems, and methods for managing corrosion under insulation of onshore and offshore installations.

In some cases, we have seen a 20-30% reduction in operating costs because people are willing to share ideas and learn things from one another

Mike Tholen, upstream policy director at Oil & Gas UK

For example, engineering technology provider TWI has designed a guided wave ultrasonic testing (GWUT) system for tank monitoring. It has been under development for several years, and is one type of inspection technology outlined in the study.

As part of an ongoing project to prove the capability of the GWUT system, it is currently deployed within a number of oil and gas storage facilities.

The study also focuses on remotely-operated mobile inspection technologies — ranging from subsea vehicles to robotic systems used to perform topside asset inspection and maintenance.

A major benefit of this type of technology, the study suggests, is the ability to inspect locations that are inaccessible to humans, or which pose serious safety concerns.

According to White, if industry can deliver improvements in the key areas outlined in the study, it will help improve asset integrity, contribute to production efficiency and safely extend the operating lives of oil and gas fields.

Brave new worlds

Mike Tholen, upstream policy director at Oil & Gas UK, which helped compile the study, says there have been several occasions in the past where the offshore industry has delivered the technologies it needed to thrive.

He adds that some of the technologies used to recover oil and gas in the North Sea 30 years ago were considered extremely advanced.

“At the time, it was ‘brave new world’ type of stuff that the industry was achieving,” Tholen says.

However, he says that industry must now undertake a journey to adapt technologies and best practice for use on existing assets, as well as upscaling and reshaping the industry to ensure its survival in the future.

A part of this survival, Tholen suggests, is finding ways to develop the myriad smaller fields in the North Sea, which contain less than 15 million barrels of oil equivalent.

“If you have a medium-sized or a large field, a lot of the technology we currently have should work quite well. But as we try and develop the smaller pockets of oil and gas, then you will need to be really canny on the technology.”

Tholen says the best way to achieve this is for industry to work closer together. He says this approach is already reaping results.

“In some cases, we have seen a 20-30% reduction in operating costs because people are willing to share ideas and learn things from one another,” Tholen says.

“And in a climate where every pound counts, it’ll start to have a big impact over time.”

Innovative approach

Tholen says there is clear eagerness throughout the industry to change and to swap ideas.

This is because of the impact the downturn the oil and gas industry has had in recent times, he adds.

Indeed, the price of oil dropped from around $115 per barrel in 2014 to just $30 per barrel at the start of the year. Today, oil sits at roughly $50 per barrel.

“The North Sea can cope with the oil price at $50 per barrel,” Tholen says. “But the outlook would be an awful lot prettier at $60 per barrel, and an awful lot prettier again at $65.”

To really cement its progression, Tholen says industry must also get behind innovative projects, such as the development of the Oil & Gas Technology Centre, which was announced earlier this year.

“The centre will not only act as a lightning conductor to push the oil and gas industry technologies that are currently out there, but it will also help us access technologies that other industries use,” he says.

Costs, risks and investment can be shared, as well as technologies and expertise, to reach better, more efficient solutions

Paul Adamson, senior systems consultant at Honeywell Process Solutions

Meanwhile, Stephen Marcos Jones, who is director of business excellence at Oil & Gas UK, says the offshore sector has to be “open for business” — which was a theme of the trade body’s recent conference.

However, he warns that the sector must also remain realistic. He says sustainable changes will only be achieved when companies aren’t just co-operating for the sake of it, but instead understand that working together will help them gain real competitive benefits.

“There are undoubtedly obstacles preventing progress, which include navigating a way through, and encouraging changes in, the complex legal and commercial landscape. There is also the global nature of the oil and gas industry where the commitment of companies may be focused on their international activities rather than the specific challenges of the UKCS,” he says.

Despite this, Paul Adamson, senior systems consultant at Honeywell Process Solutions, says operators will always consider collaboration, via joint ventures, as a means of leveraging their assets and utilising them in the most efficient ways.

“Costs, risks and investment can be shared, as well as technologies and expertise, to reach better, more efficient solutions,” Adamson says.

“As a result, the industry as a whole will benefit from stronger investment, and more marginal projects will also get the green light.”