Survey: O&G Research Spending to Increase
The Technology & Innovation Radar survey results are released today, May 5, 2014, from booth #2173 at the Offshore Technology Conference (OTC) in Houston by Lloyd’s Register Energy.
It provides insight into the adoption and development of new technologies which are fundamental for the advancement of the Oil and Gas sector in addressing the global demand for energy, and to cope with the environmental challenges in the decades ahead.
- the top three drivers of research and innovation are:
- improve operational efficiency
- improve safety
- reduce costs
- 34% of respondents indicated R&D spend is expected to increase by at least 10% in the next two years
- primary areas of innovation interest are in subsea and remote technology; innovative solutions that support increased uptime and efficiency; and the application of nano technology to better enhance oil recovery in new offshore and onshore fields
- NOCs and state-backed operators are rapidly increasing their spending on innovation and technology as they expand globally. Radical and breakthrough innovation is the aim
- oil and gas companies will engage in greater collaboration for R&D in the future by establishing partnerships, creating joint ventures and acquiring start ups
Understanding the issues
To help gain a deeper understanding of the market view, Lloyd’s Register Energy invited sector professionals, leading academics and industry bodies from 17 countries to comment on the adoption of key technologies and innovation, the time line for implementation and the impact technological advancements can have upon safety and efficiency. 20% of the respondents surveyed were based in USA.
“The preliminary results indicate we can expect strong growth for technology,” highlighted John Wishart, President of Lloyd’s Register Energy. “We will formerly announce the findings from the survey in a Technology & Innovation Radar report which will be published in June. With emission regulations and rising energy costs, the Oil and Gas sector will benefit from a clearer understanding of the potential innovation scenarios to meet future energy demands and providing robust energy supply.”
While industry has seen overall reserves and recovery rates rise, the survey indicates this is a result of innovation, such as the increase in shale gas production. Findings from the survey also suggest that technological advances will keep pushing back any possible “peak oil” point for the foreseeable future. More than 75% of respondents believe innovation is speeding up.
Lloyd’s Register Energy’s global Oil and Gas survey has so far surveyed more than 250 professionals and executives from the Oil and Gas sector. 64% were at manager level and 36% being director or above. Companies with up to US$20bn annual revenue were surveyed; more than 92% of respondents were either from a publicly-listed or privately-held company.
“While technology is moving ahead faster than regulation, society and governments are becoming more demanding in their expectations from regulators, and engineering systems have become more complicated and integrated,” highlighted Wishart.
The in-depth survey highlights the pressure on companies to innovate increased sharply in the last two years as the nature of the challenges faced get more complex.
“The current findings underline that new technology is not a barrier. It is seen as the catalyst for a better performing oil and gas sector and a competitive necessity among the key operators,” said Wishart.
A shared future of innovation
Innovation – new and improved technologies – will be critical in meeting the needs of a growing, and increasingly urbanised, population and to cope with the environmental challenges in the decades ahead. Traditional forms of energy are becoming harder to find, pushing exploration firms into deeper water, more hostile environments and increased technology costs. Finding practical ways to collaborate more closely with other organisations to share development costs for new technologies is a key factor indicated by 26% of respondents.
Aside from making our lives easier, safer and more productive, advances in technology are positively influencing the global economy.
Formal announcement of the results
The findings from Lloyd’s Register Energy’s international survey will be formally announced to its clients and the market in June, and will highlight the trends in how industry is developing and supporting the technical innovations that will play a vital role in the immediate and long-term future of the oil and gas industry.