Innovation in Our Industry
In spite of persistent global economic turmoil, various sources predict that the world will continue to need increasing volumes of hydrocarbons to support a growing population and to improve the standard of living in areas where standards are currently low. Therefore, our industry will need to continue to find and produce hydrocarbons from additional resources in increasingly complex regions and geological settings. This will make the activities in our industry more difficult and expensive and will present new challenges that will call for innovative solutions.
There is a general and well grounded belief that we still have many opportunities, in both green and brown fields. The challenge is how to bring production from these fields to the market in a manner that is cost-effective, safe, environmentally and host-community friendly, using mature and well tested techniques, equipment, and processes while we explore innovative ways to continuously improve our methods.
We live in a world where the pressure on resources will demand that smaller and smaller amounts of materials and efforts will accomplish more and more, thus achieving “ephemeralization,” (Fuller, 1938) a word that Buckminster Fuller, an American inventor, used to describe progressively accomplishing more with less. This pressure, among other factors, has driven innovation in our industry. I will examine some of the game changers that have shaped our industry in the last 10 to 20 years in my JPT columns in the coming months.
Innovation has always played a very important role in our industry, but sometimes I wonder if we under-estimate this role. Does constant contact with what we have today make us forget that such techniques were not always there and that some innovative mind brought about the new ways we now enjoy? Think about 3D seismic, deepwater drilling, horizontal drilling, some of the very sophisticated logging tools now in use, and reservoir characterization, to name only a few. The one sector outside our industry that has had a tremendous innovative impact is information technology—the effects of IT’s growth, new products, and adaptions introduced in the last 10 years has been phenomenal. How does innovation come about? What is it that makes a few of us use the huge fertility of our mind to challenge the known and seek better ways? A number of groups have studied this phenomenon and come up with what really drives innovation. I recently came across a study carried out by New & Improved, a global organizational development firm, which identified 10 things that really drive innovation (New & Improved® LLC. 2010). I have chosen to focus on the top two things: the individual and the team. I believe these are the main drivers of change in our industry.
The bedrock of the drive for change is the individual who in his/her daily life seeks improvement. He/she may be an engineer working onsite using an existing process or facility that does not quite meet the levels of delivery that are expected, and then sets out to search for new ways of improving productivity. For some, the “ah-hah moment” may come in circumstances far removed from the environment in which he/she is working. There is a story told in our industry of how an engineer buying a bottled drink in an airport noticed how a protective sheath was pulled expansively over the bottle to protect its content. This led him to think of expandable tubular, which is now being used in our industry. Innovation is everywhere.
A paper written by Ben Jones et al. discusses the advantages of teams in knowledge creation (Wuchty, S., Jones, B., and Uzzi, B. 2007). By examining nearly 20 million peer-reviewed papers and 2 million papers over the last 50 years, Jones demonstrated that the best research results predominantly emerged from teamwork rather than from individuals. This is because the complexity of our problems requires multiple skill sets, which rarely exist in one person. It requires talent, capital at centers of excellence at universities and in national and international oil and gas companies, and service providers to work on problems and come up with innovative solutions that could lead to a competitive edge or provide a commercial advantage that impacts the bottom line. It is very interesting, however, that even when companies are in competition they sometimes look for areas of cooperation so that by combining limited resources they can achieve “ephemeralization.” There are many examples where two or more IOCs have joined forces with a service company to continue work that may have been started by one
I am confident that there is an abundance of talent in and around our industry and that individuals and teams will continue to bring about innovation in the demand for more hydrocarbons. This requires attracting talent and capital. In subsequent articles, I will be examining a number of innovative game changers that have significantly impacted our industry.
- Fuller, R. Buckminster. 1938. Nine Chains to the Moon: An Adventure Story of Thought, first edition. Philadelphia, Pennsylvania: Lippincott.
- New & Improved®. 2010. What Really Drives Innovation: The Top 10 List. http://www.newandimproved.com/newsletter/2120.php (accessed August 2012)
- Wuchty, S., Jones, B., and Uzzi, B. 2007. The Increasing Dominance of Teams in Production of Knowledge. Science Magazine 136: 1036-1039.