Joint industry projects (JIPs) and initiatives in oil and gas have made a significant contribution to technological progress over decades, but one expert facilitator of the approach strongly believes they can and should deliver much more.
“We need to be more strategic and forward thinking to maximise hydrocarbon production in the years ahead, particularly when industry needs to react to more critical issues,” said Dr Patrick O’Brien, chief executive officer of ITF, the oil and gas industry technology development organisation, which recently launched its 200th JIP.
Formed in 1999, ITF is an oil and gas industry-owned, not-for-profit organisation driving purposeful, strategic and collaborative technology development. Owned by 31 international operating and service companies, it currently has 30 projects running and direct member investment is around GBP16 million (USD10m).
O’Brien’s comments coincide with growing concern and scepticism about the effectiveness of industry alliances for technology development. Critics urge improvements to the deployment of demand-led technology into the industry to make it more effective and sustainable.
He commented: “It is in everybody’s interest to maximise recovery and secure energy supplies, so we need to think carefully about the optimum make-up of each project. For some, such as those based on data sharing or developing good industry practice, a large number of participants may be essential. For others, too many participants may be a hindrance. These projects may deliver better results with a greater focus by fewer companies with a strong desire to see the particular technology developed quickly and deployed.”
Oil and gas companies spend heavily on proprietary research, but joint approaches to major challenges confronting the global industry are increasing or remain important, O’Brien said.
Arguably, he added, government has a role to play in encouraging collaboration. ITF has close links with the UK’s Technology Strategy Board.
DeepStar, the technology development for deepwater research programme launched in the Gulf of Mexico in 1991, illustrates how operators, industry experts and regulators can collaborate in a shared multi-discipline forum to address technical issues, O’Brien said. Accessing reserves in deep- and ultra deepwater and more extreme, hostile environments, continues to dominate demand for technical innovation and more cost-effective solutions.
This is not the whole story though. “There is a range of important issues to be tackled in what might be seen as more mundane developments in shallow waters, and at lower temperature and pressure,” O’Brien said. “Ageing assets, life extension, abandonment and corrosion are areas of concern, as are the costs of exploiting smaller, marginal developments. We need to keep a focus on these.”
Other areas of high current interest include smart field development, and both enhanced and improved oil recovery. ITF and DNV GL are both looking at facilitating collaborative ventures around these issues, and are working closely with industry leaders and developers to investigate new ideas.
It is important is to understand when collaboration is a good way to deliver benefits, O’Brien said. “I’m currently asking my members these questions: where is your energy for collaboration? Where are you looking to move things forward and is there a barrier to that? Would you like to share or work with others on this problem? My job is to try and make that happen as a facilitator and maintain a healthy environment for JIPs to deliver industry success.”
He continued: “There will always be competitive areas of technology development in which our members do not want to collaborate. However, there are also common needs that present barriers to development and offer opportunities for collaborative working - this is where the JIPs can play a very valuable role, leveraging funding and accelerating progress.”
That said, collaboration and competition are not either or choices. They can sometimes work together, he added. “A group of operators might gain by collaboratively funding development of equipment they all need, or service companies might work together to acquire data allowing each to develop its own products competitively,” he said.
Industry alliances have proven ability to pool knowledge, expertise and best practice, but must be improved. “We collaborate best in times of crisis, and the industry is going through difficult times at the moment. Sometimes the term does feel overused, but its effectiveness is underestimated. If you can decide when you’re going to compete and when you’re going to collaborate, be clearer about where there’s energy for collaboration and then put every effort into it succeeding, it can reap rewards,” O’Brien said.
He believes that more needs to be done to strengthen the route from early feasibility work through to deployment and commends DNV GL’s commitment to improving the efficiency of the JIP model. “With its extensive technical know-how but without having to focus on day-to-day operational issues, the organisation, like ITF, can apply long-term thinking, a very good platform for JIP success.”
ITF has been at the forefront of many significant innovations that attracted widespread industry support. At a cost of GBP1.8m and funded by six operators, the Continuous Circulation System for drilling projects took five years to complete from feasibility study to prototype manufacture, followed by field development, championed by Statoil. As the licensee, it was commercialised by National Oilwell Varco (NOV) and now has more than 2,000 connections in the field by Statoil, ConocoPhillips and Petrobras.
In partnership with Imperial College, London, UK, the Fullwave Gamechanger JIP saw the development of full-wavefield tomography technology, which has pushed forward the boundaries of seismic imaging and hydrocarbon reserve mapping. The Subsea Mudlift JIP, launched in 1996 with 22 participants, led to the development and deployment of new dual gradient drilling technology and to the delivery of Chevron’s purpose-built Santa Ana Drillship in 2012 to offer this technique.
“While we are conscious at ITF that we can do more to improve the JIP model and its practice, we are in no doubt that if the industry is to access remaining reserves, greater collaboration is needed to drive forward game-changing solutions, and we intend to play our part in making that happen,” O’Brien said.
Dr Patrick O’Brien is a chartered engineer with close to 30 years' oil and gas industry experience. He is a Fellow of the Royal Academy of Engineering, an honorary professor at the University of Aberdeen, was a founding director of Subsea UK, and joined ITF in April 2013.
Joint industry projects
DNV GL reinvests five per cent of its annual revenue into the research and development of new technologies to benefit the wider oil and gas industry as it faces up to new challenges.
As part of this commitment, the company brings together in-house technical experts with industry partners to develop new standards and industry best practice through JIPs.
Following a call for ideas, more than 200 proposals were submitted for new, DNV GL-led JIPs in 2014. This is in addition to 275 proposals for oil and gas service development initiatives. Thirty new JIPs will begin by the end of this year, following a rigorous selection process which has involved regional managers globally.
The projects will vary in scale, complexity and in the number of partner organisations, but each has a common goal: to solve a specific technical need and, where possible, to develop a new standard or technology benefiting the whole industry. Two current JIPs illustrate this approach: one on leak detection, the other on sour gas.