Oil & Gas Innovation Centre (OGIC)
Time to explore new frontiers…
PROFILE: Oil & Gas Innovation Centre (OGIC)
WHERE: Aberdeen Innovation Park
FUNDING: £10.6 million
Time to explore new frontiers
The oil and gas sector has taken a big hit over the last two years, but companies in Scotland continue to pump out a stream of new products and innovative solutions, with the Oil & Gas Innovation Centre (OGIC) in Aberdeen playing an important role by getting businesses together with researchers – not just to help the search for new deposits but explore new ideas...
Since OGIC was officially launched in November 2014, the price of oil has dropped from over $100 per barrel to about $30 per barrel, and the UK oil sector has lost over 15% of its jobs (down from about 440,000 to 370,000). Faced with such a dramatic decline in its fortunes, most other industries would probably panic, but the oil and gas sector is different – the current “crisis” is widely regarded not only as part of an industry cycle but also as a good opportunity for many companies in the supply chain to be more innovative and inventive.
After 30 years in the industry, Ian Phillips, CEO of OGIC, has “seen it all before”, but he also sees what's happening under the surface. It may take time for prices to recover, and many fields may now be unproductive or hard to exploit, but the current situation of over-supply may quickly become one of under-supply. “OGIC was conceived and launched before the drop in prices, but people are keener than ever to do innovation,” says Phillips.
The recent economic conditions have had an effect on the sector, says Phillips, but this has not stopped innovation – it has simply changed the timescale and the level of funding required. “We expected to launch about 12 projects in our first year,” says Phillips, “with a maximum OGIC contribution of about £150,000 per project. We met our target for number of projects, with average funding of about £35,000 per project. Many of these first projects are likely to develop into a further phase, so already we are seeing repeat business. What has impressed me is the number of companies with innovative ideas who are close to commercialisation – in some cases 12 months from market – that we can help by putting them together with researchers, to get over the finishing line.” Most projects so far have also involved only one SME and one university partner, with OGIC providing about half of the funds, and the business partner matching this investment.
With 14 projects funded by early 2016 and about 20 more in the pipeline, the level of activity is starting to gather momentum, and some much bigger projects are being discussed. The vast majority of companies that OGIC can help are small and medium-sized companies in the supply chain who are closer to market and want quick returns on investment. The organisation is also in talks with some big corporations, including several companies in Scotland, but results will be slower to come.
What OGIC has focused on since the beginning is “knocking on doors” – and keeping its door open to Scottish firms, organising workshops and other events. In its first year, more than 100 individual technology businesses approached it for support, and OGIC itself has spoken to 750 companies all over Scotland and beyond. The innovation centre sees itself as “a vital bridge between energy businesses with ideas that address pressing industry needs, and the world-class research capabilities in Scotland’s universities,” and the list of projects is beginning to prove that the formula works.
The project pipeline
The projects so far have been relatively modest in terms of the funding required, but the long-term gains could be enormous – and the technology involved is cutting edge. For example, US-based company Blueshift approached OGIC with a product originally developed for another industry which it believed could play a major role in oil and gas. Phillips says that many problems faced by oil and gas are “the same problems with different labels” faced by other industries, and Blueshift’s AeroZero is an excellent example – a polyimide aerogel “500 times stronger than conventional silica aerogels”, designed to improve insulation for deep-sea pipe-in-pipe oil and gas pipelines by reducing installation costs, improving pipeline compression resistance, reducing the amount of steel in pipeline constructions and, consequently, increasing oil and gas flow and assurance.
For the initial project, the Strathclyde researchers set up a multi-disciplinary team of specialists in composites design, composites engineering and materials science to focus on design and carry the project through proof of concept, processing improvements and material modification. Blueshift needed fast results and Strathclyde delivered. “This was Blueshift’s first experience working with a Scottish University, and the team demonstrated an exemplary level of technical expertise,” said Dr Garret Poe, Executive VP of Blueshift.
Another major project supported by OGIC is a new drive to reduce costs in the North Sea, expected to unlock up to £1 billion in additional revenue through improved production efficiency and cost savings. The Technology Leadership Board (TLB) has identified Asset Integrity as a technology theme, and is specifically looking to target advances in process vessel inspection and managing corrosion under insulation (CUI).
The project involves the TLB working in partnership with its industry champions, Total E&P UK and Amec Foster Wheeler, Oil & Gas UK, Oil & Gas Authority, Oil & Gas Innovation Centre (OGIC) and Industry Technology Facilitator (ITF).
Phase One has mapped out the existing technologies and identified potentially relevant technologies and processes not currently used offshore. In Phase Two, proposals will emerge for carrying out key asset integrity work – using technologies from other industries.
“This project directly responds to the maximising economic recovery agenda for the UKCS (UK Continental Shelf),” says Phillips. “All of those involved are focused on delivering technologies and processes which change the way industry deals with process vessel inspection and CUI, in order to reduce costs and unlock additional revenues that are currently lost through suboptimal activities offshore.”
The asset integrity project has huge implications, and even though OGIC is providing expertise and organising workshops rather than direct financial support, the project is more evidence of OGIC's highly focused capabilities.
Another project underlines the multi-disciplinary nature of modern research, with Glasgow University teaming up with Badger Explorer to help develop a solution for reducing the cost of evaluating subsea hydrocarbon deposits. The Badger Explorer technology is a rig-less formation and reservoir evaluation tool which drills down to the target reservoir, compacting and ejecting the drill spoil at the back end of the device using an ultrasonic compactor, using sensors to continuously record data and provide long-term monitoring of the formation. The team in Glasgow will help with testing and further research into a key component within this “game-changing” product, to develop a solution which reduces the risks, costs and complexity compared to conventional drilling rigs.
“The fact that the R&D capabilities required for this element of the project are within the University of Glasgow is testament to the enormous oil- and gas-related expertise that we have as a country, which OGIC aims to harness in support of the energy sector’s future,” says Phillips.
When the project was announced, Professor Margaret Lucas, who leads the ultrasonics group in the School of Engineering at the University of Glasgow, said: “Working with Badger Explorer demonstrates the industrial demand for our skills, taking our high-power ultrasonics research into oil and gas exploration. The group’s diverse expertise and research activities extend from ultrasonic surgical devices which could be used for a bone biopsy, to an ultrasonic drill for planetary sample retrieval.”
Phillips hopes that these initial partnerships will evolve into long-term alliances, with the universities providing world-class technical and human resources – and adding scientific credibility to projects. Phillips has observed a subtle change in policy in recent years, with universities increasingly aware they have to focus more on economic impact by recruiting more researchers with experience in industry to attract commercial funding. “Some universities have embraced this need and also changed their structure to accommodate the new business climate,” says Phillips, “and the benefits are mutual – many companies need to accelerate projects and get quick returns, and the universities have the resources required.” Some of the projects supported by OGIC have involved universities not traditionally associated with oil and gas, and this is a breakthrough which should lead to further advances and get more universities involved.
Materials science, chemistry and chemical engineering are all part of the academic mix, but OGIC will also support a new MSc Oil and Gas Innovation programme in oil and gas innovation to create a new generation of graduates more focused on the specialist needs of the industry, with training in business as well as in science. In the past, most scientists who worked in oil and gas did a “conversion course” (e.g., petroleum engineering) after completing their basic degree, but the new degree will be more business-focused, including time spent studying commercialisation and innovation development.
It’s hard to measure economic impact at this stage, but OGIC has already launched several projects which promise substantial returns, and future projects promise to be equally ambitious – and bigger in scope. Some may also lead to new production facilities and create jobs, or at least protect jobs that may have been lost. To develop an original idea into something of real economic value is a difficult journey, but Phillips is confident most of the projects that OGIC is backing will lead to significant sales, both at home and abroad. “Sometimes, a few thousand pounds unlocks millions,” says Phillips.
Decommissioning will become increasingly important over time as the older oil and gas fields reach the end of their natural lives, with the UK oil and gas industry expecting to spend an estimated £50 billion on dismantling and disposing of equipment and “plugging” the wells. Scottish companies could play a key role in the future, says Phillips, but new solutions have been slow to emerge: “It's hard to scope large decommissioning projects, and we’ve been struggling to find significant innovation – so far.” Clever chemistry and pyrotechnics would help, but the process is still “horribly expensive,” according to Phillips, so there will be opportunities in the future.
As well as helping to develop new solutions to plug oil and gas wells, OGIC also sees its role as “plugging a gap in the market,” because it has the expertise and industry contacts to help smaller companies leverage funding and identify potential research partners closer to home. Other organisations in Scotland help start-ups, provide general business advice and fund research, but do not always have the specialist knowledge required – some smaller projects may not even be on their radar, even though they have significant potential. For example, a project may only require £20,000 to fund it, but the pay-off could be huge in terms of revenues and jobs, and have “profound implications,” says Phillips.
“Oil companies don't simply throw their money at problems,” says Phillips. “Innovation is key to addressing these challenges.” Sometimes the problem – and the solution – may not even be directly related to the oil and gas sector. For example, one leading oil firm in Scotland told Phillips it spends millions of pounds every year on scaffolding, so if it could reduce these costs by helping to develop a better solution, it would also be willing to fund the research.
In future, long-term projects may require more resources, and larger companies will also get involved; but for now the motto must be “small is beautiful” for OGIC, with an emphasis on innovation closer to commercialisation. “By supporting collaboration between SMEs and academics in Scotland, we can accelerate the delivery of new technologies to market,” says Phillips. “Our initial projects demonstrate the logic of this approach and we anticipate that industry as a whole will increasingly look to near-to-market technologies as it seeks to work more efficiently.”
OGIC has already worked with several other Innovation Centres in Scotland, including The Data Lab, the Industrial Biotechnology Innovation Centre (IBioIC) and CENSIS (the Innovation Centre for Sensor and Imaging Systems). These three are natural partners for OGIC, but Phillips is also excited about possible collaborations with the Scottish Aquaculture Innovation Centre (SAIC), helping fish farms make the move from busy coastal areas to deeper and more remote waters. Inspecting the cages will be a big challenge, requiring special video technologies and sensors, so expertise from oil and gas will play a major role.
“The idea from the start was to look out for possible partnerships with other Centres,” says Phillips, “to kick around ideas and explore new opportunities. But the network is already working much better than most of us ever expected.”
To paraphrase Phillips, austerity may be “the mother of invention,” with industry budget cuts forcing a radical rethink of how to explore and exploit our reserves. Innovation will certainly get a big boost from this change in approach, with smaller players in the supply chain providing solutions to improve efficiency and reduce costs, but when industry fortunes improve, these innovative companies will be even more in demand. And Phillips and his colleagues at OGIC will be more than happy to help.
OGIC’s main priorities are:
> improving exploration outcomes;
> well construction, drilling and completions;
> enhanced oil recovery;
> asset integrity and life extension;
> shale gas exploitation;
> product optimisation and decommissioning.
How it works
The innovation journey usually begins when businesses approach OGIC with an idea – problem owners needing innovative solutions or developers needing assistance to bring innovations to market – and OGIC sends out a call to researchers for expressions of interest. If they want to be involved and help accelerate the project, the universities describe the researchers available and their track record, and more detailed discussions are held to come up with a concrete proposal. OGIC draws on a panel of about 30 industry experts and selects a maximum of five specialists to assess each proposal: Is it innovative? Does it benefit oil and gas? If the project passes these tests, OGIC writes a contract and the project begins.
First success for OGIC
Hydrasun and the University of Strathclyde have completed the testing of an innovative well intervention solution – the first project approved and funded by OGIC.
Hydrasun is a leading provider of integrated fluid transfer, power and control solutions to the energy, petrochemical, marine and utilities industries, including flexible hoses. The new well intervention hose is designed to maximise the production of oil and gas from subsea wells by keeping the well, and its associated control equipment, clean and free from restrictions or blockages such as hydrates or wax, which can reduce production rates – enabling significant savings over conventional systems.
The work done by the Strathclyde researchers involved destructive and fatigue testing of a number of samples, which provided information on the product’s performance capabilities in different simulated operational conditions.
Ernie Lamza, Chief Operating Officer at OGIC, said: “The collaboration between Hydrasun and the University of Strathclyde enabled testing of a new technology to accelerate qualification and open dialogue with potential end users.”
“The funding process with OGIC proved to be incredibly quick and responsive and made the whole process very easy,” said Ben Coutts, Director of Engineering and Research & Development at Hydrasun.
New rock technology rocks
The University of Aberdeen has taken delivery of new high-pressure/high-temperature rock deformation apparatus from Sanchez Technology in France, thanks to funding from OGIC. The kit can test rock and cement samples under conditions of extreme temperature and stress, replicating conditions deep beneath the sea floor. By providing accurate data on the properties and the behaviour of rocks under such conditions, the equipment can aid exploration and production activity at depths far in excess of current drilling activity.
Dr David Healy of the School of Geosciences at Aberdeen, said: “As operators go deeper and deeper, there are significant technical challenges to overcome as conditions become hotter and more pressurised. This apparatus can make a tangible difference by providing companies with accurate data at depths of up to ten miles, to reduce the risks to operators, and potentially encourage new exploration activity.”
Visit the OGIC website: www.ogic.co.uk