ITF Urges Government & Industry to Adopt Single Strategy for UK Oil and Gas Technology Development

Published Mar 31, 2011 1:42 PM by The Maritime Executive

ITF urges government and industry to adopt single strategy for UK oil and gas technology development

ITF’s Managing Director will today call on government and industry to create a single strategy for oil and gas technology funding to help secure the recovery of remaining reserves in the UK Continental Shelf (UKCS).

Neil Poxon, who heads up the organisation that facilitates the development and deployment of technology for oil and gas operators and service companies, will outline his concerns at the Oil and Gas Outlook conference in Aberdeen today.

He is urging a more joined up approach, similar to the model used in Norway, which helps bring oil and gas technology to market at least six years faster than the 16 year average in the UK.

Mr Poxon said: “There is a huge amount of duplication in oil and gas technology development in the UK, which is not only wasting millions of pounds, but is putting us at a disadvantage for efficiently securing the UKCS’s remaining reserves.

“I believe that a single strategy, that agrees the priority technology needs and secures joint funding from government and industry, would enable the UK to maintain its reputation for innovation, whilst supporting local technology companies and the economy.”

Mr Poxon revealed that it takes on average 16 years to bring oil and gas technology to market in the UK, which is twice as long as other industries excluding only space exploration. There are a number of organisations that help drive oil and gas technology development with the government funding the Technology Strategy Board and oil and gas members funding ITF, but there is no umbrella strategy or centralised financial commitments.

It has been estimated that 5.6 billion boe  (barrels of oil equivalent) of reserves could be made economic over a five year period in the UK through deployment of new technologies, providing a total potential gross revenue in present value terms of £78 billion.

Mr Poxon said: “Norway is already looking much further ahead to 2020 – 2050, but in the UK we are taking a shorter view and discussing priorities for the next ten years. We need to turn this approach on its head and start speaking now about developing those big future game-changers. Redirecting current government energy technology funds with matched finance from industry, would create the bigger pot of money necessary and cut the duplication. This is even more pertinent following the recent tax change as this is likely to affect North Sea technology spend.”

Mr Poxon is consulting oil and gas industry bodies and is growing support for the move to a single strategy which he believes could be led by  PILOT, the joint programme involving government and oil and gas businesses, which aims to secure the long-term future of the industry in the UK along with Industry Advisory Groups (IAGs).

Malcolm Webb, Oil & Gas UK’s chief executive, said: “We need to find a way to break through the risk barriers to encourage the application of newer, innovative technologies that improve the identification and delivery of incremental reserves from the UKCS.”

Alex Kemp, Professor of Petroleum Economics at Aberdeen University is supportive: “There is no doubt that a single strategy between organisations such as the Technology Strategy Board and ITF would be beneficial in delivering new technologies to access the North Sea’s remaining reserves. Given ITF’s level of specialist knowledge, it is important that they are supported to drive those new technologies and speed up the process of delivery into the field. The knock-on effect of more collaboration and joint funding would be positive for the local economy and job creation.”

Melfort Campbell, OBE, the joint chair of Scottish Enterprise’s Oil & Gas Industry Advisory Group and CEO of Imes Group said: “We are currently in an era of rapid advancement through innovative technology development.  Whilst the UK is doing well, we could do much better if we had a more cohesive, focused and managed approach to ensure we not only compete but take the lead in the field of technology development.”

Dr Simon Puttock, Executive Director of the Energy Technology Partnership agrees: “The Energy Technology Partnership (ETP) supports proposals for a more coordinated approach to both the identification and funding of innovative technologies in the UK Oil and Gas sector.”

A not-for-profit organisation, ITF is owned by 27 global oil and gas operator and service companies. It has successfully launched 170 joint industry projects and secured around £50 million investment from its member companies to bring new technology to market. ITF’s members offer up to 100% funding for innovative technologies that meet key industry challenges.

Photo: MIMS – Dr Stephen Taylor of Liverpool University with his Mini Mass Spectometer – a technology funded by ITF members  - the novel oil-in-water monitor is based on technology used by the Mars Space Lander searching for water.