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Innovation as standard - News for the Oil and Gas Sector

Scotland is synonymous with globally significant innovation, having brought the world television, the telephone, the steam engine, anaesthesia, radar, the cash machine and the world’s first mammal cloned from an adult stem cell – Dolly the sheep.

In the 50 years since oil was first discovered in the UK North Sea, Scotland has risen to the challenge.

It has developed new technologies that have helped overcome geological complexities in extraction, devising new well technologies to make extraction safe in deeper and more hostile environments, and overseeing the development and commercialisation of groundbreaking technological and engineering advancements.

Over the years, Scotland has also become a key exporter of talent, taking engineering, process management and best practice to all corners of the globe.

Many industry advances incubated in the North Sea sector have now been universally adopted by the global oil and gas majors.

A steady pipeline of new technologies is also continually being propagated in Scotland’s world-renowned universities.

The latest wave of development has been driven by the industry’s efforts to reduce costs in a prolonged oil price slump, marrying cutting-edge technologies with advanced software, artificial intelligence (AI), machine learning and robotics to drive an
innovation revolution centred around productivity improvement.

A recent report by MarketsandMarkets, a leading market research consultancy, suggested AI spend across the industry will reach $2.85 billion by 2022 as oil and gas majors look to new technologies to deliver cost savings in surveying, exploration and inspection and repair, and to manage and interpret vast swathes of data in real time.

Scotland has been a leader in this sea change, and in 2017 the Oil & Gas Technology Centre (OGTC) was launched with a mission to work with industry to drive technological innovation, connect industry with world-class innovators and deliver technology adoption through field trials in the UK Continental Shelf (UKCS) and beyond.

The centre is also building “innovation capacity”, investing millions in the development and launch of the National Decommissioning Centre with Aberdeen University.

Launched in January, this facility is a hub for decommissioning and late life asset management research and development, marrying academia, professional engineers and industry.

Driving innovation is always challenging: allocating cash to research and development, particularly during a sustained downturn, is a hard sell – even for the largest majors.

However, successful companies know they must continue to adapt to survive, and one positive from the most recent industry downturn has been a marked shift in the speed of development and adoption of new technologies, primarily those driving efficiencies.

For an industry historically slow to adopt new technologies, cushioned from challenge in a price-controlled market, the challenge from the shale boom in the US forced the industry to adapt, and quickly.

And the speed of technological change, like in many other aspects of our lives, is disrupting the status quo.

Many would argue this is not before time. Scotland has already laid the foundations to drive the next wave of technological development as extraction moves into ever more hostile environments and, longer term, to powering the technologies of the future.

One thing of which we can be certain is that Scotland will play a key part in these developments.

Keir Willox is an energy specialist and partner at Shepherd and Wedderburn LLP

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