Oil firms explain diverse technology strategies at Aberdeen conference

Sept. 6, 2001
Oil and gas companies have adopted a variety of methods for selecting, developing, and applying technology. At the Offshore Europe conference in Aberdeen, representatives of four operating companies described their approaches.

ABERDEEN, Sept. 6 -- Oil and gas companies have adopted a variety of methods for selecting, developing, and applying technology.

At the Offshore Europe conference here, representatives of four operating companies described their approaches.

The largest companies in the group -- BP PLC and a unit of Shell Exploration & Production Ltd. -- have formal systems for encouraging rapid technical innovation. One of the smaller companies -- Amerada Hess Corp. -- deliberately leaves technical development to others.

"We are not a technology company," explained Steve Jewell, Amerada Hess global head of drilling and well technology. "We do not develop new technologies. We simply apply them."

Larger companies, Jewell said, can take different approaches because of their global asset portfolios and ability to absorb failure.

He said his company follows the "fast-follower approach, relying on service companies to develop technology. Amerada Hess seeks methods that are suited to specific purposes, reliable, and "compatible with the way people work."

As an example of the latter quality, he cited visualization technology, the main advantage of which Amerada Hess sees as bringing people from different disciplines together to work on specific problems.

In general, Jewell said, the oil industry's technological advance is "purely evolutionary," making it "ripe for revolutionary change."

Areas of evolutionary advance in which Amerada Hess is especially interested include application of seismic methods to depths of 30,000 ft, improved seismic imaging, deepwater and subsea applications, and reservoir modeling.

Potential revolutionary advances, Jewell said, include laser drilling and use of nanotechnology -- molecular machines -- in reservoir development. Those advances, he said, probably will come from outside the industry.

The representative of another mid-sized company also emphasized external technology development.

"Ninety-eight percent of great ideas come from outside your company," declared Helge Haldorsen of Norsk Hydro AS.

He said because technical development is increasingly collaborative, there is less secrecy than in earlier industry eras. An important factor of success, therefore, is speed in "capturing, adapting, and applying" new technologies.

But Haldorsen acknowledged that operating companies can take advantage of creativity within their organizations.

"Some companies are doing that better than others," he said.

Shell uses formal programs for developing technology internally, reported John Darley, director of Shell Exploration & Production Technology.

One, called technology mapping, involves deliberate steps for creating technologies for specific applications. Another provides a rapid system for evaluating and developing ideas from employees.

Shell uses "global implementation teams" to take new technologies to operating units and overcome resistance to implementation. And it has a program called "technology positioning" for targeting internal research and development.

Shell also develops technology in collaboration with other companies, often through joint ventures.

Darley said four areas of special technical interest for Shell are smart wells, expandable tubulars, underbalanced drilling, and time-lapse seismic imaging.

At BP PLC, said Kenny Lang, vice-president for upstream technology, a central concern is to assure that technology plans are "intimately linked" with business plans.

Lang described a formal method BP applies for deciding whether to build or buy technology, with decisions to build related mainly to proprietary areas such as seismic processing and reservoir characterization. BP tends to favor a collaborative approach for technologies such as seafloor processing and dual-gradient drilling.

Like Shell, BP has internal programs for encouraging innovation, fostering development, and addressing the problem that "ideas don't line up perfectly with our budgeting cycle."

Lang stressed the importance of focusing technology development on "business processes that matter" and "getting technology to business fast."