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Lloyd’s Register Energy survey points to 10 per cent rise in oil and gas research funding

06th May 2014

New research from Lloyd’s Register Energy explores the drivers for technology and innovation in the global oil and gas industry

Lloyd’s Register Energy survey points to 10 per cent rise in oil and gas research funding
34 per cent of respondents indicated research and development spend is expected to increase by at least 10 per cent in the next two years

The Technology and Innovation Radar survey has highlighted the development of new technologies as fundamental for the advancement of the oil and gas sector in addressing the global demand for energy, and to cope with the environmental challenges in the decades ahead.

The report highlighted the top three drivers of research and innovation as:

  • to improve operational efficiency,

  • to improve safety,
  • to reduce costs.

34 per cent of respondents indicated research and development spend is expected to increase by at least 10 per cent in the next two years.

Primary areas of innovation interest are in subsea and remote technology; innovative solutions that support increased uptime and efficiency; and the application of nano technology to better enhance oil recovery in new offshore and onshore fields.

NOCs and state-backed operators are rapidly increasing their spending on innovation and technology as they expand globally - radical and breakthrough innovation being the aim.

Oil and gas companies will engage in greater collaboration for research and development in the future by establishing partnerships, creating joint ventures and acquiring start-ups.

To help gain a deeper understanding of the market view, Lloyd’s Register Energy invited sector professionals, leading academics and industry bodies from 17 countries to comment on the adoption of key technologies and innovation, the time line for implementation and the impact technological advancements can have upon safety and efficiency, with 20 per cent of the respondents surveyed based in USA.

“The preliminary results indicate we can expect strong growth for technology,” highlighted John Wishart, President of Lloyd’s Register Energy. “We will formerly announce the findings from the survey in a Technology and Innovation Radar report which will be published in June. With emission regulations and rising energy costs, the Oil and Gas sector will benefit from a clearer understanding of the potential innovation scenarios to meet future energy demands and providing robust energy supply.”

While industry has seen overall reserves and recovery rates rise, the survey indicates this is a result of innovation, such as the increase in shale gas production. Findings from the survey also suggest that technological advances will keep pushing back any possible “peak oil” point for the foreseeable future. More than 75 per cent of respondents believe innovation is speeding up.

“While technology is moving ahead faster than regulation, society and governments are becoming more demanding in their expectations from regulators, and engineering systems have become more complicated and integrated,” highlighted Wishart.

The in-depth survey highlights the pressure on companies to innovate increased sharply in the last two years as the nature of the challenges faced get more complex.

“The current findings underline that new technology is not a barrier.  It is seen as the catalyst for a better performing oil and gas sector and a competitive necessity among the key operators,” said Wishart.

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