TECHNOLOGY FROM EUROPE

ITF addresses technology needed for North Sea viability

Dr. David Ellix, recently appointed managing director of the United Kingdom’s Industry Technology Facilitator (ITF), explains the important role that ITF has to play in the development of new technological solutions for the oil and gas industry.

Q. Dr Ellix, what is the background that brought about ITF?

A. Technological advances and innovations have played an important role in the continuing economic development of the oil and gas industry during the 1990s. However, the complexity and uncertainty of developing small fields, and the difficulties involved in mature field production mean that technology is ever more crucial to the future viability of the North Sea. Yet, the industry is entering this mature phase without the technologies needed to avoid accelerated production decline and loss of UKCS reserves in the next five to 10 years.

In response, the UK government set up an Oil and Gas Industry Task Force, comprising representatives from government, academia and industry. This group concluded that there was a need to develop a cross-industry body to stimulate technology development. Seventeen operating companies (see accompanying table) agreed to support formation of such a company, and ITF thus was born.

Q. What is ITF’s role?

A. In general, ITF aims to be a catalyst in the industry, encouraging the timely development of new products and techniques to solve member-companies’ problems. This is achieved by managing effective communication between technology suppliers and users, creating an environment that ensures the industry, as a whole, works on technologies needed to extend the economic life of the UKCS.

As a result, ITF’s key roles are to stimulate innovators by providing greater clarity on industry’s needs and available funding opportunities, and to gain greater value by properly aligning industry’s "needs" through collaborative technology planning and funding.

Q. Who sets ITF’s technological agenda and what is it?

A. The Oil and Gas Task Force that recommended ITF’s formation also identified six key technology clusters that it felt were important to the industry. These include multi-lateral wells, coiled tubing drilling, through-tube drilling, underbalanced drilling, smart wells and facility automation.

A number of technologies with respect to new reserves were also identified, including mono-diameter wells, high-resolution seismic, dynamic reservoir modeling, and long tie-back technologies addressing flow assurance and back-pressure reduction. These areas are the main focus for ITF, although the company retains an openness to new technology advances and blue-sky re-search that may be appropriate.

The ongoing re-view of technology focus areas and advice on potential joint industry projects (JIPs) is provided by a Technology Advisory Committee (TAC) set up by ITF. The TAC includes representatives from all industry stakeholders-operators, the government, technology suppliers (particularly small companies), industry associations and universities / research institutes.

Q. What is the process for establishing joint industry projects?

A. In generating new JIP proposals, ITF will operate simultaneously in two distinct modes that are classified as technology "push" and "pull." Having identified and publicized the key business-driven theme areas, ITF will be open to ideas and proposals from any interested party. These can even be posted via our website (www.oil-itf.com), where strict confidentiality of intellectual property will be observed.

To generate new JIP proposals, ITF will function simultaneously in technology "push" and "pull" modes.

In this reactive or technology push mode, ideas and proposals will be assessed for relevance and potential impact by our TAC and three working groups covering subsurface, wells and facilities. Appropriate proposals will be developed and put forward to our members and other funding sources for financial support.

We also will operate proactively in technology pull mode. The ITF technology brokers, together with their working groups, will examine the industry’s needs to establish technology gaps and possible routes to solutions. From this, the objectives for JIPs will be defined, and projects will be established by calling on all companies with appropriate expertise and capability. The accompanying flow diagram shows the modus operandi.

Q. Does ITF have an international function?

A. ITF was set up in response to specific UKCS problems, but we cannot escape the fact that oil is an international business. Our member-companies all compete in an international market. While helping them solve their technological problems, ITF needs to take a global view. Indeed, our members do not care whether the solution to a problem is found in Europe, the U.S., Asia or wherever – the important thing is that a solution is found. As a result, we will consider project proposals from anywhere, as long as they address technology requirements set by TAC.

In addition, we need to consider the role for UK-based technology within the global industry. Since ITF is also supported by the UK Department of Trade and Industry, export of technology will be a subsidiary objective.

Q. Will ITF be responsible for managing, as well as creating JIPs?

A. ITF will not undertake research in-house or manage JIPs. ITF’s role is solely to create projects based on the themes and priorities set by its members. We aim to facilitate effective communication between technology suppliers and users, thus creating an environment that encourages a systems view of the industry’s needs. This will ensure that the industry, as a whole, works on the right technologies.

Once a JIP has been approved and funding is agreed upon, ITF will assist in making sure that proper project management is in place and that all parties involved are happy with the arrangements. However, at this stage, ITF will withdraw and focus on setting up the next JIP. We will maintain a watching brief on the JIPs that we establish. This will ensure that our overall direction is correct and that we learn any lessons from how the projects progress.

Q. Why do you think there is a specific need for a company like ITF?

A. Innovation has always been important in the oil business. This is particularly true during times of low prices, as experienced recently. It was clear that the upstream industry’s development process was not delivering new technology quickly enough and that something was required.

ITF is the catalyst that will speed up technology development. A team of three technology brokers will be responsible for actively "marrying" the oil companies’ technology needs with technological solutions that smaller, innovative companies can provide.

In addition, the major oil companies have recognized the need for such a facilitator, and ITF will provide the complete customer / supplier overview required for effective collaboration, which is currently not available in the industry. In addition, few firms have adequate resources for setting up JIPs and making the most of external funding opportunities. Nor can one company act as an independent broker in the process. This last point is important. ITF is a not-for-profit company funded solely by subscriptions from its member-companies. As a result, it can be truly independent and seen by technology suppliers as an "honest broker."

Q. How would you summarize the benefits that ITF brings to oil companies and suppliers?

A. ITF will benefit oil companies and large contractors by collecting the views of all stakeholders and identifying the areas where they are prepared to work. We will set up JIPs that address key business themes and provide expert support in securing external funding for JIPs. ITF also reduced the number of interfaces with technology providers.

Benefits to technology suppliers will include a recognized route through which they can present their ideas to customers; a contact that can clarify customers’ needs and provide market data; and assistance with funding and investment. In general, ITF will help supply-side organizations enhance their links with industry, and facilitate the delivery of higher value from their expertise and activities.

Q. What is ITF’s long-term goal?

A. The long term is not something that we have the luxury of pondering at present. ITF has been set up to address an immediate need, and our success will depend solely on the top-quality projects that we deliver to our members.

We have to hit the deck running. As quickly as possible, we need to establish a position, where we are seen by the industry as the vehicle by which all stakeholders can: agree on key, collaborative technology needs, form JIPs and secure funding for them from external sources. In effect, ITF will connect what industry needs with what researchers and technology delivery companies can provide, and with what the public and private sectors want to fund.

Our aim is to be a small, dynamic, troubleshooting organization. We will set-up JIPs to address particular problems and then move on to the next challenge – management will be left to the project partners. The positive response from the oil industry and the government means that everyone is working together to make sure that ITF succeeds, and that by the end of 2000, we will have a significant number of top-quality JIPs underway.

The author

Dr. David Ellix, managing director of ITF, studied at the City University, London, between 1977 and 1984, and earned a BSc degree and PhD in civil engineering. His career has included three years at BHRA (now Caltec) undertaking contract R&D for the oil and gas industry, followed by three years at MaTSU, where he managed offshore safety-related R&D for the (then) UK Department of Energy. In 1990, Dr. Ellix joined Amerada Hess, where he worked on setting up a new technology function and a number of pre-development prospects, and he was responsible for the development of facilities at South Arne field in the Danish sector of the North Sea. He took charge of ITF in February 2000.