OIL AND GAS FOR THE 21ST CENTURY - OG21
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OIL AND GAS FOR THE 21ST CENTURY STRATEGY DOCUMENT
OG21 – Norway's oil and gas technology strategy for the 21st century Drammensveien 288, 1327 Lysaker, Norway E-mail: ghl@rcn.no www.og21.no Design: Fete typer + Savant Print: 07 Media AS
OG21 - Oil and gas for the 21st century 3
INTRODUCTION
OG21’s vision is to have a competitive The Norwegian Petroleum Directorate
Norwegian petroleum sector. To achieve estimates that more than 50 percent
this we need to maximize resource of the resources on the Norwegian
utilization, improve industry productiv- continental shelf are still to be pro-
ity, reduce cost and reduce greenhouse duced, thus there is a considerable
gas emissions. This is a challenging task, potential for further resource utilization
where utilization of technology and and value creation from our industry.
innovation will be key to success. The OG21 has carried out value estimates of
new OG21 strategy sets the direction for developing and adopting the technolo-
prioritization of technology develop- gies recommended in the strategy, and
ment and gives recommendations for the estimates are impressive: It shows
how to accelerate technology develop- that improved technology and exper-
ment and use. tise can provide as much as 14 billion
extra barrels of oil equivalents from the
Scientists, engineers and technology Norwegian continental shelf over the
leaders in oil companies, universities, next decades.
Elisabeth B. Kvalheim research institutes, supplier companies
and governmental bodies have over the Cooperation between all parties in the
last 1.5 years worked on the new OG21 Norwegian petroleum industry is one
strategy, and agreed to common chal- of our competitive advantages. My goal
lenges and an aligned strategy on how is that this strategy will be useful for
technology can lift our competitiveness. the entire industry, to inspire and help
All OG21 stakeholders have been invited efficient development and implemen-
to actively contribute and follow the tation of new promising technologies.
revision process. I am glad to see that But remember, a strategy is only as
the industry has taken ownership of the good as its execution and the reward
strategy and contributed with valuable of technology is only harvested if it’s
efforts. But this is only the first step. implemented!
Now the strategy needs to be taken
into our everyday work to realize the
full potential bottom line effects. Public
funded research programs need to be Many thanks for all efforts and good
updated to reflect the recommenda- reading,
tions in the new strategy, and industry
enterprises should take guidance
from the strategy in their technology
programs.
OG21 have identified ten technology Elisabeth B. Kvalheim
needs: OG21 Board Chair
×× Three linked to the industry’s
responsibility to reduce emissions.
×× Two related to improved recovery
and subsurface understanding.
×× Three linked to improved efficiency
and reduced costs.
×× And two cross disciplinary topics:
digitalization and technologies for
the High North.
4 EXECUTIVE SUMMARY CONTENTS 1 EXECUTIVE SUMMARY 7 2 PURPOSE AND SCOPE 15 2.1 About OG21 16 2.2 Purpose of this strategy revision 17 2.3 New elements in this strategy revision 18 2.4 Interfaces with other strategy documents 18 2.5 Abbreviations 19 3 OG21'S VISION AND STRATEGIC OBJECTIVES 21 4 PRIORITIZED TECHNOLOGY NEEDS 25 4.1 TTA1 – prioritized technology needs 28 4.2 TTA2 – prioritized technology needs 29 4.3 TTA3 – prioritized technology needs 30 4.4 TTA4 – prioritized technology needs 31 4.5 Addressing technology needs 33 5 INCENTIVES AND BARRIERS TO TECHNOLOGY DEVELOPMENT AND APPLICATION 35 5.1 Barriers to technology development and application 36 5.2 Strategies to reduce or remove barriers 36 5.3 The Norwegian innovation system and competence needs 38 5.4 Petroleum R&D funding and prioritizations 44 5.5 Private equity investments in technology development 46 5.6 Technology and competence transfer between industries 47 5.7 New business models 48 5.8 Social science and cross-disciplinary research 49 6 OG21 RECOMMENDATIONS 51 6.1 Recommendations on technology development 52 6.2 Recommendations on stimulation of technology application 54 6.3 Recommendations on competence 55 6.4 Summarized overview of the OG21 strategy 56 7 STRATEGY IMPLEMENTATION 59
OG21 - Oil and gas for the 21st century 5
8 REFERENCES 63
APPENDICES 64
APPENDIX A.ABOUT OG21
A.1. Organization 65
A.2. Mandate (in Norwegian) 66
A.3. The OG21 strategy contributors 67
APPENDIX B – OPPORTUNITIES FOR THE NORWEGIAN PETROLEUM SECTOR
B.1. Petroleum in the global energy mix 68
B.2. Maximize resource utilization on the NCS 69
B.3. Minimize environmental impact 70
B.4. Improve productivity and reduce costs 75
B.5. Develop innovative technologies 76
B.6. Attract, develop and retain the best talents 76
APPENDIX C – DETAILS ON PRIORITIZED TECHNOLOGY NEEDS
C.1. Prioritized technology needs for each TTA 79
C.2. Technology needs overview map 86
APPENDIX D – VALUE OF ADDRESSING TECHNOLOGY NEEDS
D.1. Maximizing resource utilization 92
D.2. Minimizing environmental impact 93
D.3. Improve productivity and reduce costs 94
D.4. Develop innovative technologies 94
D.5. Attract, develop and retain the best talents 94
APPENDIX E – IMPLEMENTATION AND FOLLOW-UP
E.1. Communication and stakeholder engagement 96
E.2. Implementation and follow-up 96
6 EXECUTIVE SUMMARY
OG21 - Oil and gas for the 21st century 7
01
EXECUTIVE
SUMMARY
Photo: Shutterstock
8 EXECUTIVE SUMMARY
EXECUTIVE
SUMMARY
Vega field
Illustration: Statoil
The petroleum industry is Norway’s most import- to address the challenges. OG21 was established
ant industry in terms of income to the state, by the Ministry of Petroleum and Energy in 2001.
employment, export of petroleum products and Since the first version of the strategy in 2001, the
export of services and equipment to the global document has been revised every 5 years, and it
petroleum industry. The successful development has been due for a new revision in 2016.
of the Norwegian petroleum industry is founded
on a skilled and competent workforce and the The OG21 strategy shall contribute to:
implementation of advanced technologies. The ×× Efficient and environmentally friendly value
Norwegian continental shelf is today one of the creation from the Norwegian continental shelf
most technologically sophisticated petroleum for several generations.
provinces in the world, and Norway based sup- ×× Development of world class petroleum expertise
pliers have become global leaders within many and industry enterprises.
offshore petroleum segments.
It is likely that petroleum will continue to dominate OG21’S VISION IS: TECHNOLOGIES AND
the global energy mix for decades to come. Less INNOVATION FOR A COMPETITIVE
than 50 percent of petroleum resources on the NORWEGIAN PETROLEUM SECTOR.
Norwegian continental shelf have been produced,
and Norway is in a good position to supply petro-
leum to the global market also in the future. The vision expresses a desire to secure the com-
petitiveness of the Norwegian Continental Shelf
New technologies and competencies to develop and of the Norway based petroleum supplier
and adopt technologies will continue to be a key industry by developing, implementing and adopt-
success factor in the further development of the ing technologies. The vision is supported by five
Norwegian continental shelf and the Norway based strategic objectives:
supplier industry. In response to this, OG21 (Oil and 1. Maximize resource utilization
gas for the 21st century) has developed a national 2. Minimize environmental impact
technology strategy for Norway that guides tech- 3. Improve productivity and reduce costs
nology and research efforts of the authorities and 4. Develop innovative technologies
the industry. OG21 brings government, business 5. Attract, develop and retain the best talents
and research environments together to identify
technology challenges and agree on strategies
OG21 - Oil and gas for the 21st century 9
10 EXECUTIVE SUMMARY
Subsurface map generated
with advanced seismic data
interpretation software.
Illustration: Schlumberger
The strategic objectives as well as related chal- ×× Improved subsea and unmanned systems:
lenges and opportunities for the Norwegian Technologies that reduce development costs
petroleum sector, are outlined in Section 3 of the and increase the capabilities of subsea and
strategy document. unmanned production systems.
×× Enhanced oil recovery: Offshore technologies
The main priorities of OG21 are reflected through that increase production of mobile oils and
the choice of Technology Target Areas (TTAs): enable production of immobile oils.
TTA1 Energy efficiency and environment ×× Digitalization: Enabling automation, autonomy
TTA2 Exploration and increased recovery and ICT-technologies for all petroleum industry
TTA3 Drilling, completions and intervention disciplines. The technology needs reach across
TTA4 Production, processing and transport data acquisition, data management, data qual-
ity, data integration, decision support and data
Technology needs identified and prioritized security.
through the TTAs are: ×× High North: Technologies that address particular
×× Improved energy efficiency: Technologies con- challenges of the currently opened areas in the
tributing to more efficient energy production Norwegian parts of the Barents Sea, including
and less energy consumption. shallow reservoirs, carbonates, long distances
×× Zero carbon emissions: Technologies enabling and logistics and protection of the environment.
renewable power supply to offshore facilities,
electricity from shore, CO₂ storage, CO₂ use for A further detailing and prioritization of technology
enhanced recovery, and cost-efficient, needs is provided in the strategy document under
de-carbonized hydrocarbon value chains. each Technology Target Area in Section 4.
×× Protection of the external environment:
Systems and technologies that reduce oper- The value of technologies is realized when tech-
ational discharges and emissions, improve nologies are applied or commercialized. Section
management of safety barriers and minimize 5 of this strategy document therefore includes
impacts of accidental spills. discussions of drivers and barriers to technology
×× Subsurface understanding: Technologies for development, adoption and implementation.
better understanding of geology and reservoirs.
×× Drilling efficiency and P&A: Technologies that RECOMMENDATIONS ON ADDRESSING
reduce the overall work effort for well construc- PRIORITIZED TECHNOLOGY NEEDS:
tion and well plugging, thereby lowering the OG21 is of the opinion that the current organiza-
costs of exploration and production wells as well tion and structure of the public funded innovation
as of plugging and abandonment (P&A). system works well for the petroleum industry, and
×× Production optimization: Processing, downhole should be continued. Public funded petroleum
and intervention technologies that increase the research programs should now be updated to
regularity, availability and productivity of wells reflect the prioritized technology needs and the
and installations. recommendations of the revised OG21 strategy.OG21 - Oil and gas for the 21st century 11 OG21 calls for a strengthening of public funding of petroleum research. Public funding of petroleum research offers high return to the society and is becoming increasingly more important as a result of more complex technology challenges on the Norwegian continental shelf. The Petromaks2 budget should be increased considerably over the 2017–2021 period, whereas the Demo2000 budget, which increased substantially from 2015 to 2016, should be maintained at the 2016 nominal level over the 2017–2021 period. Petro Centers address topics of high strategic importance, and a new center on low emission petroleum technologies should be considered. Petroleum industry enterprises, universities and research institutes should update their R&D and technology strategies to reflect the guidance in the revised OG21 strategy. RECOMMENDATIONS ON HOW THE APPLICATION OF VALUE-ADDING TECHNOLOGIES COULD BE STIMULATED: Barriers to technology adoption and implementa- tion should be reduced. Authorities should look at incentives mechanisms to encourage the implemen- tation of new technologies with high societal value. Cap X. Illustration: Statoil The industry should continue its efforts on stan- dardization to simplify implementation of new technologies and reduce unit costs. Cross-disciplinary research that includes social sciences could be important to further understand drivers and barriers to technology development, adoption and implementation, and should be inte- grated in public funded petroleum research programs.
12 EXECUTIVE SUMMARY
Åsgard subsea gas compression. Photo: Aker Solutions
RECOMMENDATIONS ON ADDRESSING OG21 strategy implementation:
COMPETENCE NEEDS:
Learning from other industries and adopting OG21 will communicate the strategy to its stake-
solutions from other regions of the world would be holders through conferences, seminars and
an efficient approach to address many of the prior- meetings. OG21 has well established connections
itized technology needs, and should be reflected in with most stakeholder groups. These connections
public and industry R&D and technology strategies will be maintained. OG21 needs to strengthen its
and programs. engagement with the supplier industry, and will
leverage established industry clusters’ networks to
The petroleum industry has lost competence achieve this.
during the activity downturn in 2014–2016. A com-
petence and organizational capability shortage Implementation status is evaluated annually by
could hit the petroleum industry when activities the OG21 board. Topics that need further follow-up
rebound. The industry needs to maintain core through deep dive studies or stakeholder engage-
competencies and capacity throughout activity ment are included in the annual OG21 activity
cycles. plans.
The activity downturn has also reduced the indus- OG21 strategic recommendations and results from
try’s attractiveness to students and professionals. deep dive studies are presented and discussed
OG21 and industry organizations need to put at the annual OG21-forum, open to all interested
special efforts into increasing students’ interest for stakeholders.
petroleum core subjects, and to attract profes-
sionals with digitalization, automation and ICT
competencies.
Section 6 of the strategy document contains fur-
ther details on the recommendations.OG21 - Oil and gas for the 21st century 13
SUMMARIZED OVERVIEW OF THE OG21 STRATEGY:
VISION: TECHNOLOGIES AND INNOVATION FOR A COMPETITIVE NORWEGIAN PETROLEUM SECTOR
STRATEGIC OBJECTIVES:
×× Maximize resource utilization
×× Minimize environmental impact
×× Improve productivity and reduce costs
×× Develop innovative technologies
×× Attract, develop and retain the best talents
TECHNOLOGY NEEDS (DETAILS IN SECTION 4)
Improved energy Zero carbon Protection of Subsurface Drilling efficiency
efficiency emissions the external understanding and P&A
environment
Production Improved subsea Enhanced oil Digitalization High North
optimization and unmanned recovery technologies
systems
STRATEGIC RECOMMENDATIONS (DETAILS IN SECTION 6)
Address prioritized Stimulate application of Address
technology needs value-adding technologies competence needs14 PURPOSE AND SCOPE
OG21 - Oil and gas for the 21st century 15
02
PURPOSE AND
SCOPE
2.1 About OG21 16
2.2 Purpose of this strategy revision 17
2.3 New elements in this strategy revision 18
2.4 Interfaces with other strategy documents 18
2.5 Abbreviations 19
Subsea factory. Illustration: Aker Solutions16 PURPOSE AND SCOPE
PURPOSE
AND SCOPE
Åsgard subsea compression. Photo: Elin A. Isaksen / Statoil
2.1 About OG21 Technology opportunities and chal-
lenges have been identified, described
OG21 has its mandate from the and prioritized by Technology Target
Norwegian Ministry of Petroleum and Area groups (TTAs):
Energy (MPE). The purpose of OG21 is TTA1 Energy efficiency and
to “contribute to efficient and environ- environment
mentally friendly value creation from TTA2 Exploration and increased
the Norwegian oil and gas resources recovery
through a coordinated engagement of TTA3 Drilling, completions and
the Norwegian petroleum cluster within intervention
education, research, development, TTA4 Production, processing and
demonstration and commercialization. transport
OG21 will inspire the development and
use of better skills and technology”. The TTAs have members from oil com-
panies, universities, research institutes,
OG21 brings together oil companies, suppliers, regulators and public bodies.
universities, research institutes, sup-
pliers, regulators and public bodies to Appendix A provides further details on
develop a national petroleum technol- OG21 and its organization.
ogy strategy for Norway.OG21 - Oil and gas for the 21st century 17
Johan Sverdrup. Illustration: Statoil
2.2 Purpose of this tion, technologies will need to have a licensing round.
potential application on the Norwegian ×× Increased international competition
strategy revision
continental shelf to become prioritized in the offshore petroleum service
by OG21. markets.
The first OG21 strategy document was ×× Reduced activities and uncertainties
developed in 2001. The strategy docu- Since the OG21 strategy was last revised about the future activity level, result-
ment has been revised every 5 years. It in 2011, several influencing factors have ing in restructuring of companies and
was last revised in 2011 and it is due for emerged or changed, for example: redundancies.
a new revision in 2016. ×× Cost inflation on equipment and ser- ×× An increasing pace of digitalization
vices in the petroleum industry. and automation in all industries.
The OG21 strategy provides recommen- ×× Oil price decline and uncertain future
dations to the Norwegian petroleum price development.
sector on research and development ×× An increased attention to green-
(R&D) and technology prioritizations. It house gas (GHG) emissions and new
addresses the full R&D value chain from pledges to reduce emissions through
ideas to technology implementation. the COP21 agreement.
×× Delimitation agreement between
Technology needs have been prioritized Russia and Norway in the Barents
based on the degree of alignment with Sea, and acreage awards in the
OG21’s strategic objectives. In addi- South-East Barents Sea in the 23rd18 PURPOSE AND SCOPE
2.3 New elements in this 2.4 Interfaces with other
strategy revision strategy documents
New elements as compared to the pre- OG21 has important interfaces to other
vious revision of the strategy document, strategy processes. See figure 1.
are:
×× Energy efficiency and reduction of Energi21 is the national technology
GHG emissions have been evaluated strategy for renewable energy. OG21
across all Technology Target Areas. has interfaces with Energi21 on Carbon
×× Digitalization and automation capture and storage (CCS), power
discussed into detail across all transmission and use of renewables for
Technology Target Areas. power supply.
×× Specific technology needs for High
North (i.e. within currently opened Maritim21 is the national technology
areas including South East Barents strategy for the maritime industry.
Sea) identified across all Technology Interfaces with OG21 include: marine
Target Areas. operations, mobile drilling units, gas
×× Barriers to technology implementa- transport, emergency preparedness
tion and adoption, and measures to technologies and automation and
reduce barriers, have been identified. autonomy. Maritim21 revises its strategy
×× A need for social science research in 2016.
to further understand drivers and
barriers for technology application, The Research Council of Norway
has been identified. develops a new Petroleum health,
safety and working environment (HSE)
strategy (knowledge basis) document
in 2016. It includes HSE elements such
as working environment, occupational
FIGURE 1
Interfaces between OG21 and other strategy processes
safety and major accident risks. OG21
covers technical integrity, reliability
and maintenance, environmental risks
and environmental preparedness
ENERGI21 technologies.
MARITIM21 The Norwegian Oil and Gas Association
and the Federation of Norwegian
OG21 Industries has issued a technology road-
RCN – PETROLEUM HSE
map towards 2050 that describes at a
generic level, the need for technologies
NOROG AND NORSK INDUSTRI- within the petroleum sector to improve
TECHNOLOGY ROADMAP 2050
energy efficiency and reduce climate
gas emissions.OG21 - Oil and gas for the 21st century 19
2.5 Abbreviations
AICV Autonomous inflow control valve NCS Norwegian continental shelf
bbl Barrels NIFU Nordisk institutt for studier av
BCG Boston Consulting Group innovasjon, forskning og utdanning
bcm Billion cubic meters NOU Norsk offentlig utredning
boe Barrels oil equivalent nmVOC Non-methane volatile organic compound
BOP Blowout preventer NPD The Norwegian Petroleum Directorate
CCS Carbon capture and storage NVCA The Norwegian Venture Capital & Private
COE Center of excellence Equity Association
COP21 Conference of the parties (2015 United OG21 Oil and gas for the 21st century
Nations Climate Change Conference) opex Operational expenditures
CRI Center for research based innovation P&A Plugging and abandonment
EU The European Union PDO Plan for development and operation
EOR Enhanced oil recovery PSA The Petroleum Safety Authority
IEA The International Energy Agency SIVA Selskaper for industrivekst
GCE Global centre of excellence STEM Science, technology, engineering and
GHG Greenhouse gases mathematics
G&G Geology and geophysics R&D&I Research and development and
ICT Information and communication innovation
technology RCN The Research Council of Norway
IN Innovation Norway RLWI Riserless light well intervention
IOR Improved oil recovery SSB Statistisk Sentralbyrå
IP Intellectual property TCM Technology Center Mongstad
IPCC International panel on climate change TTA Technology Target Area
LTP Langtidsplan for forskning og høyere UiS University of Stavanger
utdanning UiT University of Tromsø
MLT Multi-lateral technology 450S 450 parts CO₂ per million, scenario from
MPE The Ministry of Petroleum and Energy IEA corresponding to IPCC’s 2 degrees
NCE National centre of excellence scenario20 OG21'S VISION AND STRATEGIC OBJECTIVES
OG21 - Oil and gas for the 21st century 21
03
OG21'S VISION
AND STRATEGIC
OBJECTIVES
Photo: Shutterstock22 OG21'S VISION AND STRATEGIC OBJECTIVES
OG21'S VISION
AND STRATEGIC
OBJECTIVES
OG21’s vision and strategic objectives The vision is supported by five stra-
are shown in Figure 2. tegic objectives. Table 1 shows the
strategic objectives and a summary of
OG21’s vision “Technologies and inno- opportunities and challenges related to
vation for a competitive Norwegian each. Opportunities and challenges are
petroleum sector”, expresses a desire to described in more detail in Appendix B.
make the Norwegian continental shelf
highly competitive with other petro- The strategic objectives have formed
leum provinces in the world through the basis for the identification and prior-
the application of safe, efficient, and itization of technology and competence
productivity enhancing technologies. needs described in section 4.
It includes an ambition of further
strengthening Norwegian competence
and technology providers to become
successful in the international market
for offshore petroleum equipment and
services.
FIGURE 2
OG21’s vision and strategic objectives
VISION: TECHNOLOGIES AND INNOVATION FOR A
COMPETITIVE NORWEGIAN PETROLEUM SECTOR
Maximize Minimize Improve Develop
resource environmental productivity and innovative
utilization. impact. reduce costs. technologies
Attract, develop and retain the best talentsOG21 - Oil and gas for the 21st century 23
TABLE 1 OG21 strategic objectives, and summary of opportunities and challenges related to each
STRATEGIC OBJECTIVE OPPORTUNITIES AND CHALLENGES
Maximize resource ×× Optimize production from existing fields – About two thirds of the NCS production
utilization in 2030 is expected to come from existing fields (i.e. with approved PDO), of which
a large portion from legacy fields. Need to maintain mechanical integrity, keeping
opex/bbl low and have cost-efficient wells.
×× Mature portfolio of discoveries to become sanctioned projects – approximately
68 out of 88 existing discoveries (in 2016) are likely to be subsea developments
w/ tie-back to existing infrastructure. This calls for life extension of hubs,
de-bottlenecking and cost-efficient subsea solutions.
×× Exploration efforts over the next years vital to replace production after 2030.
×× Production and reserves forecasts are dependent upon cost levels. Keeping costs
down is essential.
×× Develop High North discoveries with low carbon footprint. Particular challenges
include shallow reservoirs, karstified carbonates, long-distances, and concerns for
potential environmental impact.
Minimize environmental ×× Improve energy efficiency of existing infrastructure – The petroleum production
impact represented 28% of Norway’s CO₂-emissions in 2015.
×× Develop low-carbon solutions for new fields – New large fields could produce for
decades to come.
×× Reduce environmental risk from continuous discharges –Norway has a global
leading position on low emissions and discharges, and the position should be
maintained.
×× Reduce risk for accidental releases – Low risk acceptance, especially High North,
calls for continued efforts to improve mechanical integrity, monitoring and oil spill
preparedness.
Improve productivity and ×× NCS needs to stay competitive compared to onshore and offshore petroleum
reduce costs provinces elsewhere.
×× Develop and implement technologies that enable faster and higher production
with less effort and with improved safety. Need for remote control, automation
and autonomy.
×× Reduce opex for mature fields – Currently competitive opex/bbl on the NCS, but
increase in opex/bbl expected unless productivity is improved.
Develop innovative ×× Strengthen Norwegian technology and competence suppliers’ global competitive
technologies position – Strong growth 2001–2014, drop in 2015–2016, a possible rebound within
few years, if able to adapt products and services to new market realities.
×× Respond to growing international competition in important market segments
– Market shares have dropped in subsea and drilling equipment segments.
×× Maintain the Norwegian Continental Shelf as a province for testing and early use of
value-adding technologies.
Attract, develop and retain ×× Turn young people’s perception of the petroleum industry – Norway’s petroleum
the best talents industry delivers energy to the world’s growing population, and does so with the
lowest carbon footprint of the global petroleum provinces.
×× The industry needs access to qualified people and sufficient capacity for the future
activity level.24 PRIORITIZED TECHNOLOGY NEEDS
OG21 - Oil and gas for the 21st century 25
04
PRIORITIZED
TECHNOLOGY
NEEDS
4.1 TTA1 – prioritized technology needs 28
4.2 TTA2 – prioritized technology needs 29
4.3 TTA3 – prioritized technology needs 30
4.4 TTA4 – prioritized technology needs 31
4.5 Addressing technology needs 33
Hugin. Photo: Kongsberg Maritime26 PRIORITIZED TECHNOLOGY NEEDS
PRIORITIZED
TECHNOLOGY
NEEDS
The Goliat field
Photo: Eni Norge
Åsgård subsea compression system. Illustration: Aker Solutions
Technology needs have been priori- ×× P rotection of the external environ- development costs and increase the
tized based on the degree of alignment ment: Systems and technologies that capabilities of subsea and unmanned
with strategic objectives and the reduce operational discharges and production systems.
potential business and societal values. emissions, improve management of ×× Enhanced oil recovery: Offshore
Furthermore, technologies will need safety barriers and minimize impacts technologies that increase pro-
to have a potential application on the of accidental spills. duction of mobile oils and enable
Norwegian continental shelf to become ×× Subsurface understanding: production of immobile oils.
prioritized. Technologies for better understand- ×× Digitalization: Enabling automation,
ing of geology and reservoirs. autonomy and ICT-technologies for
n a high level, the detailed technology
O ×× Drilling efficiency and P&A: all petroleum industry disciplines.
needs prioritized by the TTAs fall under Technologies that reduce the overall The technology needs reach across
the categories: work effort for well construction and data acquisition, data management,
×× Improved energy efficiency: well plugging, thereby lowering the data quality, data integration, deci-
Technologies contributing to more costs of exploration and production sion support and data security.
efficient energy production and less wells as well as of plugging and ×× High North: Technologies that
energy consumption. abandonment (P&A). address particular challenges of
×× Zero carbon emissions: Technologies ×× Production optimization: Processing, the currently opened areas in the
enabling renewable power supply downhole and intervention technol- Norwegian parts of the Barents Sea,
to offshore facilities, electricity from ogies that increase the regularity, including shallow reservoirs, carbon-
shore, CO₂ storage, CO₂ use for availability and productivity of wells ates, long distances and logistics and
enhanced recovery, and cost-efficient, and installations. protection of the environment.
de-carbonized hydrocarbon value ×× Improved subsea and unmanned
chains. systems: Technologies that reduceOG21 - Oil and gas for the 21st century 27
28 PRIORITIZED TECHNOLOGY NEEDS
T TA1 – prioritized technology needs
4.1
The prioritized technology needs of TTA1 – Energy efficiency and environment are summarized in Figure 3. A detailed list of the
TTA1 prioritized technology needs is provided in Appendix C
FIGURE 3
Technology needs prioritized by TTA1 – Energy efficiency and environment
OG21 VISION: TECHNOLOGIES AND INNOVATION FOR A COMPETITIVE
NORWEGIAN PETROLEUM SECTOR
STRATEGIC OBJECTIVES:
×× Maximize resource utilization
×× Minimize environmental impact
×× Improve productivity and reduce costs
×× Develop innovative technologies
×× Attract, develop and retain the best talents
TTA1 – ENERGY EFFICIENCY AND ENVIRONMENT: PRIORITIZED TECHNOLOGY NEEDS
Integrated environmental Oil spill preparedness Produced water Cost effective subsea
monitoring and modelling management for EOR safety barriers
systems chemicals
Improved efficiency Improved weather Improved Technical safety
of power and heat forecasting High North communications High barriers High North
production NorthOG21 - Oil and gas for the 21st century 29
4.2 T TA2 – prioritized technology needs
The prioritized technology needs by TTA2 – Exploration and increased recovery are summarized in Figure 4. A detailed list of
the TTA2 prioritized technology needs is provided in Appendix C.
FIGURE 4
Technology needs prioritized by TTA2 – Exploration and increased recovery
OG21 VISION: TECHNOLOGIES AND INNOVATION FOR A COMPETITIVE
NORWEGIAN PETROLEUM SECTOR
STRATEGIC OBJECTIVES:
×× Maximize resource utilization
×× Minimize environmental impact
×× Improve productivity and reduce costs
×× Develop innovative technologies
×× Attract, develop and retain the best talents
TTA2 – EXPLORATION AND INCREASED RECOVERY: PRIORITIZED TECHNOLOGY NEEDS
CO2 for EOR and storage Improved reservoir Understand and maintain well
understanding and management productivity, and smart well
solutions
Improved HC-prospect Water diversion and radical new Improved exploration
identification EOR methods technologies30 PRIORITIZED TECHNOLOGY NEEDS
4.3 T TA3 – prioritized technology needs
The prioritized technology needs by TTA3 – Drilling, completions and intervention are summarized in Figure 5. A detailed list of
the TTA3 prioritized technology needs is provided in Appendix C.
FIGURE 5
Technology needs prioritized by TTA3 – Drilling, completions and intervention
OG21 VISION: TECHNOLOGIES AND INNOVATION FOR A COMPETITIVE
NORWEGIAN PETROLEUM SECTOR
STRATEGIC OBJECTIVES:
×× Maximize resource utilization
×× Minimize environmental impact
×× Improve productivity and reduce costs
×× Develop innovative technologies
×× Attract, develop and retain the best talents
TTA3 – DRILLING, COMPLETIONS AND INTERVENTION: PRIORITIZED TECHNOLOGY NEEDS
Smart well Drilling and Drilling automation All electric Reduce intervention
solutions completion for and autonomy subsea wells cost and increase
challenging reservoir exposure from
reservoirs existing subsea wells.
Energy efficient Plugging and High North wellbore High North shallow
rig power abandonment positioning and reservoirs drilling
generation of wells navigation systems solutionsOG21 - Oil and gas for the 21st century 31
4.4 T TA4 – prioritized technology needs
The prioritized technology needs by TTA4 – Production, processing and transport are summarized in Figure 6. A detailed list of
the TTA4 prioritized technology needs is provided in Appendix C.
FIGURE 6
Technology needs prioritized by TTA4 – Production, processing and transport
OG21 VISION: TECHNOLOGIES AND INNOVATION FOR A COMPETITIVE
NORWEGIAN PETROLEUM SECTOR
STRATEGIC OBJECTIVES:
×× Maximize resource utilization
×× Minimize environmental impact
×× Improve productivity and reduce costs
×× Develop innovative technologies
×× Attract, develop and retain the best talents
TTA4 – PRODUCTION, PROCESSING AND TRANSPORT: PRIORITIZED TECHNOLOGY NEEDS
Life extension Produced Unmanned operations Efficient marine Integrated
of fields water handling operations monitoring
Lean stand-alone Flexible field Cost-efficient utilization Autonomous Energy
field development development of host platform by subsea components, systems generation and
concepts concepts developments and decision support management
Process simulation High North High North shallow
and optimization flow assurance reservoirs, subsea facilities
incl. subsea compression32 PRIORITIZED TECHNOLOGY NEEDS
OG21 - Oil and gas for the 21st century 33
Continuous Motion Rig.
Photo: West Group
RDS drill floor robot.
Photo: Robotic Drilling
System.
4.5 Addressing It is the industry's responsibility and
also in their own best interest, to
technology needs
develop, implement and adopt technol-
ogies. However, as described in Section
According to a study conducted by 5.1, many barriers exist for efficient
Rystad Energy (2016), development and development and application of new
application of technologies addressing technologies. A typical example is that
the OG21 priorities offer huge rewards new technologies and competencies
to businesses and society. The main often become available in the market
findings of the study are presented in within short time after development.
Appendix D. Combined with the deployment risks
and potential costs associated with
OG21's ambition is that the high new technologies, the incentives for
estimated value of new technology conducting R&D and testing out new
will encourage industry enterprises to technologies may be too weak.
develop and implement technologies
addressing the prioritized technology Public support of petroleum research
needs. OG21 recommends that stake- therefore continues to be important
holders such as industry enterprises, to stimulate technology development,
universities and research institutes, and public funded petroleum R&D
consider the OG21 priorities when programs should now be updated to
updating their R&D / technology reflect the OG21 priorities.
strategies.34 INCENTIVES AND BARRIERS TO TECHNOLOGY DEVELOPMENT AND APPLICATION
OG21 - Oil and gas for the 21st century 35
05
INCENTIVES AND
BARRIERS TO
TECHNOLOGY
DEVELOPMENT
AND APPLICATION
5.1 Barriers to technology development
and application 36
5.2 Strategies to reduce or remove barriers 36
5.3 The Norwegian innovation system and
competence needs 38
5.4 Petroleum R&D funding and prioritizations 44
5.5 Private equity investments in
technology development 46
5.6 Technology and competence transfer
between industries 47
5.7 New business models 48
5.8 Social science and cross-disciplinary
research 49
Installation of Nini East. Photo: DEA Deutsche Erdoel AG36 INCENTIVES AND BARRIERS TO TECHNOLOGY DEVELOPMENT AND APPLICATION
INCENTIVES AND BARRIERS TO
TECHNOLOGY DEVELOPMENT
AND APPLICATION
High societal
Barriers to
5.1 value, but lower Piloting
business value challenges
technology development
and application NCS
Contractual
structural
barriers
OG21 have identified barriers to technol- challenges
ogy development and implementation. LEADERSHIP AND
An overview is shown in Figure 7, and COMMITMENT
High Lack of
more details are given in Table 2.
perceived standardization/
risks standards
FIGURE 7
Types of barriers to technology development Lack of
and implementation
Technology
full potential competence
not harvested and organizational
capability
5.2 Strategies to reduce or But the responsibility and opportunity standard technical specifications,
to reduce or remove most barriers lay as well as standard interfaces and
remove barriers
with OG21's stakeholders. OG21 there- communication protocols to enable
fore needs to engage its stakeholders to component interchangeability.
OG21 works to reduce barriers for tech- take ownership of actions:
nology development and application in ×× The industry should work to enhance urthermore, the authorities could con-
F
three ways: the use of novel, value-adding tech- tribute to reducing barriers by:
1. Address what OG21 can directly nologies through measures such as: ×× The authorities should evaluate
influence. – Contract strategies in projects whether sufficient incentives are in
2. Recommend R&D to reduce barriers. that encourage the use of new place to encourage the application
3. Engage stakeholders that can reduce value-adding technology. of new technologies with high soci-
barriers. – Commercialization strategies with etal value.
robust partnerships and convinc- ×× Authorities should actively
Elements that OG21 can directly influ- ing business cases. use established instruments to
ence are mainly related to public R&D ×× The industry should continue its encourage implementation of val-
priorities, covered in section 5.4 in this standardization efforts to simplify ue-improving technologies.
report. Further R&D to reduce barriers is deployment of new technology and ×× The effects of the voting rules in
discussed in Section 5.8. reduce unit costs. Examples include NCS licenses on technology uptake
standard material specifications, should be further investigated.OG21 - Oil and gas for the 21st century 37
TABLE 2 Barriers to technology development and implementation
BARRIERS DESCRIPTION
Technologies full potential ×× Component potential not utilized due to inferior system compatibility, lack of
not harvested integration or system bottlenecks.
×× Effects dependent upon other new or legacy systems/technologies (brownfield).
×× Insufficient access to input resources, e.g. power, CO₂, data and information.
×× Operational envelope not fully utilized due to lack of trust in new technology.
×× Lack of a functioning CCS value chain.
High perceived risks ×× Some technologies are intrusive - affect cash flow if problems.
×× Risk perception, aversion and conservatism.
×× Perceived or real HSE risks.
Contractual barriers ×× Lack of contract incentives that encourage the use of new, value-adding
technologies.
×× Unclear IP-rights.
High societal value, but ×× Required rate of return higher in oil companies than for the state.
lower business value ×× Capital constraints - capital intensive technologies are not favored.
×× Market too small for technologies addressing too specific needs.
Piloting and first use ×× Lack of access to real conditions for some types of technologies, e.g. oil spill
challenges technologies, intrusive technologies.
×× Logistical challenges - Lack of field infrastructure, remoteness, environmental
concerns, quantities of equipment or chemicals.
×× High costs.
×× Uncertainty of effects, e.g. for EOR -long time until effects materialize.
×× Reliability/integrity of new technologies improve over time – first mover
disadvantage.
×× Weaknesses in partnership.
×× Lack of long-term commitment from oil companies.
NCS structural challenges ×× Smaller fields/licenses have lower capacity to carry technology development.
×× NCS portfolio effects not considered – optimization on project level.
×× Wide spread in focus among operators from integrated oil&gas companies with
technology focus to financial entities with little intention of technology
development and implementation.
×× License voting rules blocking technology implementation.
×× Lack of competition among suppliers.
×× Lack of infrastructure in frontier areas.
Competence and ×× Lack of organizational capability to understand and address technology needs.
organizational capability ×× Lack of competence to develop and implement technologies.
Lack of standardization/ ×× Lack of standard interfaces and communication protocols that enable component
standards interchangeability.
×× Lack of standard technical specifications and materials specifications
Leadership and ×× Strategic decisions of being “fast followers” or “market proven”-procurement only.
commitment ×× Lack of steering signals or ambiguous steering signals on importance of
innovation, risk acceptance and need for change.38 INCENTIVES AND BARRIERS TO TECHNOLOGY DEVELOPMENT AND APPLICATION
FIGURE 8
Illustration of the Norwegian innovation system, based on collaboration and interaction
Supplier Research
Operators Spin-offs Authorities
Industry Institutes
Innovation
Universities SIVA COE/CRI/FME Enova
Norway
Investors International
Petro Centers OG21 RCN
– seed money research
5.3 The Norwegian SIVA has an important role for the com- strategic challenge for the industry,
mercialization of technologies at higher and it covers a phase when access to
innovation system and
education institutions as it provides capital is scarce. In addition to support
competence needs infrastructure for industry, startups and of demonstration and first use of new
research environments. SIVA's incubator technologies, ENOVA also provides
The Norwegian innovation system is program is of particular importance financial support for implementation
characterized by collaboration and (NIFU, 2015). of proven technologies resulting in
close connections between industry improved energy efficiency and reduced
enterprises, research institutes and OG21 is of the opinion that the public CO₂-emissions.
universities, public bodies and financial R&D&I financing instruments serve the
investors and funds, as illustrated in petroleum industry well, and that it has Carbon Capture and Storage (CCS) is
Figure 8. contributed to creating world leading an important strategic element for EU
petroleum clusters. The instruments in its plans for reductions of greenhouse
OG21, with its 100+ people network, include: gas emissions, and for Norway both in
contributes with a focused technology ×× Sector specific R&D programs such terms of being an integral part of the
strategy aligning stakeholders around as Petromaks2 and Demo2000. EU greenhouse gas emission system
common goals and technology needs. ×× Petro Centers (IOR-senter at UiS and and for strengthening the future market
The OG21 strategy is operationalized ARCEx at UiTromsø) position for natural gas. Climit is an R&D
through public R&D programmes and ×× Open R&D arenas where petro- program managed by Gassnova and
support instruments and engagement leum sector enterprises compete the Research Council of Norway, which
of industry enterprises. OG21 is one with other industries, e.g. Centers supports technology development
important cog in an efficient innovation of Excellence, Centers for research within CO₂ capture, transport, injection
system that has resulted in global lead- based innovations, and Infrastructure. and storage. Gassnova manages the
ing petroleum clusters. ×× SkatteFUNN. CO₂ capture demonstration project at
×× Industry Innovation Norway sup- Technology Center Mongstad (TCM),
Public support of R&D&I is channelled ported cluster programs such as and is also responsible for the planning
through the institutions: the Research GCE Node, GCE Subsea, GCE Blue of full scale projects with the aim of
Council of Norway, Innovation Norway Maritime and Subsea Valley. demonstrating the full CCS chain from
(IN), ENOVA, Gassnova and SIVA. The capture to storage.
main support mechanisms and pro- ENOVA funding of energy efficiency
grammes offered by RCN, IN, ENOVA and and climate technology projects is a
Gassnova, relevant for petroleum related new and important opportunity for
enterprises, are shown in Figure 9. the petroleum sector. It addresses aOG21 - Oil and gas for the 21st century 39
FIGURE 9
R&D&I financing instruments managed by the RCN, Innovation Norway and ENOVA
RESEARCH
COUNCIL OF Petromaks2 Demo2000
NORWAY
Petro Centers
COE CRI
SkatteFUNN
INFRASTRUCTURE
Forny2020
Centres for env.friendly
energy research
Climit R&D
GASSNOVA Climit Demo
TCM
Full scale
INNOVATION GCEs / NCEs/ Arena
NORWAY
Pre-seed funds Seed funds (e.g. ProVenture Seed II)
Start-up grants
Innovation / risk loans
IFU / OFU
Env. techn. arrangement
ENOVA Grants Energy and Climate
Technology
Phases of
Pre-seed Seed Venture
industrialization
Technology
0 1 2 3 4 5 6 7
maturity
(API 17N) Unproven Study or Experimental Prototype Pre- Production Production Production
concept experiment proof of tested production system system system field
Basic R&D to prove concept system interface installed and proven
concept environment tested tested
tested40 INCENTIVES AND BARRIERS TO TECHNOLOGY DEVELOPMENT AND APPLICATION
OG21 - Oil and gas for the 21st century 41
Technology Center Mongstad.
Photo: TCM
A major obstacle to CCS within EU is OG21’s technology priorities are oper- in Figure 11: OG21 reviews the program
access to suitable storage locations. ationalized, among others, through plans, and RCN monitors that the proj-
NPD has developed CO₂ storage atlases research programs administered by ect portfolios reflect the program plans
demonstrating that the NCS, and the RCN, see Figure 10. OG21 believes through portfolio evaluations.
especially the North Sea, is well suited that the established R&D programs’
for storage of large quantities of CO₂. structure and organization support the The challenge of harvesting the full
CO₂ is in many cases also efficient as an close collaboration philosophy. The potential of new technologies was
injection fluid for enhanced oil recovery, petroleum programs' boards have a identified as a barrier in Section 5.1.
but access to sufficient quantities of broad industry representation, and their OG21 therefore recommends: To better
CO₂ has historically been a limitation on project evaluation processes and criteria understand the value of new technolo-
the NCS. reflect industry needs. The competition gies and how technologies depend on
for funding and the project selection system integration, petroleum research
To make CCS attractive, costs need to process results in high quality R&D programs should encourage holistic
be reduced and a well-functioning value projects. R&D approaches, including system
chain needs to be established. The public perspectives.
funded Climit, TCM and full-scale demon- A successful implementation of the
stration programs organized through OG21 strategy in public funded R&D
RCN and Gassnova and co-funded by projects is reflected in the RCN project
industry partners, are important stepping portfolio. The implementation is being
stones to achieve this. monitored through two steps as shown
FIGURE 11
FIGURE 10 Implementation of the OG21 strategy through
OG21 influences public petroleum R&D funding and priorities RCN petroleum R&D programs
NORWEGIAN MINISTRY OF PETROLEUM AND ENERGY OG21 STRATEGY
Vetting
OG21
PROGRAM PLANS
THE RESEARCH COUNCIL OF NORWAY ×× Demo2000
Portfolio evaluations
×× Petromaks2
PETROMAKS 2 DEMO 2000 PETRO CENTER R&D PROJECTS42 INCENTIVES AND BARRIERS TO TECHNOLOGY DEVELOPMENT AND APPLICATION
Sand screen test lab.
Photo: Hung Ngo / Iris
OG21 advocates close collaboration Governmental white paper on research relevant. The petroleum industry is
between industry and universities/ and higher education (Langtidsplan for complex and technologically chal-
research institutes. Within technology forskning og høyere utdanning – LTP) lenging. It needs professionals from
disciplines, close industry involvement on the need for such collaboration (St. many disciplines such as economics,
is associated with high quality research meld. nr. 7, 2014–2015). law, mathematics, natural science and
(Perkmann et al, 2011). Collaboration engineering and technology. A general
results in high industry relevance of LTP describes a need for more Ph.D’s high educational level is important for
R&D, and it provides the industry access within technology, mathematics and developing and maintaining world lead-
to new ideas and solutions. A NIFU natural science. The public petroleum ing industry clusters.
report suggests that Norwegian uni- research funding through the Research
versities are industry oriented and that Council of Norway is an important For addressing the OG21's scope, the
they conduct more applied technology contributor to Ph.D.-education in natural science, technology, engineer-
research than the average of universities Norway with 122-136 Ph.D. positions ing and mathematics (STEM) subjects
in 13 other countries (2011). The report during the years 2013–2015 (RCN, are considered the most important.
refers to other studies that suggest that 2016). Petromaks2 is the dominant According to a NIFU study, STEM
a Norwegian engineering and technol- source of petroleum Ph.D. funding, subjects increased significantly in pop-
ogy research culture has evolved over but with important contributions also ularity among students at Norwegian
time that prioritizes industry relevance through other programs such as the institutions for higher education during
over academic publishing. Petro Centers, the Industry Ph.D.- the period 2003–2013 (NIFU, 2014).
arrangement, and various COEs/CRIs. The same study did however not find
Likewise, close connections between a corresponding increase neither in
industry and academia in the design Collaboration across disciplines such direct research funding nor academic
of study programs is important for as engineering, physics and social personnel for the STEM subjects. The
the continual development of industry science spur innovation (St.meld. nr. 7, modest increase in research funding is
relevant competencies. OG21 therefore 2014–2015). OG21 encourages cross- entirely linked to external sources, such
supports the recommendation in the discipline R&D collaboration when as through the RCN.OG21 - Oil and gas for the 21st century 43
A GENERAL HIGH
EDUCATIONAL LEVEL
IS IMPORTANT FOR
DEVELOPING AND
MAINTAINING WORLD
LEADING INDUSTRY
CLUSTERS.
Despite the increase in STEM students, International collaboration is important, oritized in the EU research programs,
a study carried out for OG21 reveals that and especially for smaller countries like national petroleum research as well as
the petroleum industry could experi- Norway. Much of the competence and bilateral research collaboration become
ence challenges in attracting highly technology development take place particularly important for the petroleum
qualified candidates within petroleum internationally, and improvements industry (St.meld. nr. 7, 2014–2015).
core disciplines such as geology, to productivity is dependent upon
geophysics, and reservoir engineering the competence to apply and adopt Norway currently has bilateral
(Rystad Energy, 2016). This is a concern technologies developed internationally agreements on petroleum research,
to OG21, and OG21 needs to work with (NOU 2015:1). A study comparing uni- technology development and higher
the petroleum industry to improve versities in 14 countries, concludes that education with among others the USA
the attractiveness of the industry to Norwegian universities are significantly and Brazil, and further collaboration
students. more internationally oriented than the agreements should be evaluated based
average among the countries examined on strategic needs for the Norwegian
The LTP describes a need for more (NIFU, 2011). petroleum industry, e.g. for the High
people with advanced ICT-education. North.
Professionals with advanced ICT Petroleum research is not priori-
degrees are becoming increasingly tized within EU's research program
more important to a petroleum industry Horizon2020. However, technologies
going through a digitalization transi- with their origin in the petroleum indus-
tion to become more automated. OG21 try could be developed and adopted
supports the view of the LTP that R&D for use in other industries, and such
on «enabling technologies» such as ICT, technologies are within the scope of the
bio-technology, nano-technology and EU program (RCN, 2015).
advanced production systems, should
be strengthened. Since research on technologies for use
in the petroleum industry is not pri-You can also read
