Whether you call it oil money, or the more recent term petro-dollars, the hydrocarbon sector has long been a by-word for wealth. Countries with oil revenues are rich, and oil and gas companies have resources aplenty. It’s easy to assume, they can find the funds to do pretty much whatever they like.
In the dream of oil executives, perhaps; but not in the real world. In fact, finances in the oil and gas sector are squeezed as hard as they are everywhere else. ‘Oil wells are expensive and only a quarter of them are successful,’ explained Prof Ann Muggeridge, holder of the Total Chair in Petroleum Engineering at Imperial College London:
in this sense, she added, ‘successful’ just means that the well contains oil or gas and says nothing about how much there might be or even whether it would be profitable to extract it. ‘So companies have to be very choosy about what they spend their finite resources on.’
In recent years, this has hit research and development particularly hard. Whereas 25 to 30 years ago, the major companies all operated large central laboratories and research departments that handled all their technological requirements, these have gradually been eroded in the cause of cost control. The result of this is that oil and gas companies are now major players in the area of technology transfer, casting around for research streams and technologies that might prove useful to them and bringing them into their portfolios. (see Canada’s Oil Sands Innovation Alliance – COSIA)
Each company has its own way of doing this, but BP’s vice-president of public partnerships, Bob Sorrell, explained that, in general, companies will have a suite of technologies that they consider to be core to their competitiveness and will tend to use their own research facilities to develop these specialities, and will depend on technology transfer for subjects outside these areas.
According to Sorrell, there are three reasons an oil company might choose to turn to technology transfer to solve a problem. ‘The first is that just by looking at the problem that you’re facing, you may just by talking to someone from a different sector get a fresh perspective on how to solve it. Second, someone may have solved the problem already. And third, it make sense to work in emerging areas.”
But Muggeridge said such decisions tend to be made on the basis of the specific problems a company is facing at a particular time, such as getting oil or gas out of a specific well or group of wells in similar geology if they aren’t performing up to expectations. ’In my experience, the industry tends to be focused on its immediate performance and it isn’t very good at looking forward to long-term technology needs, although there are of course exceptions such as carbon capture and storage.’
(Source: The Engineer)