Innovation and Technology in the Energy Industry

Energy companies are increasingly relying on technology and innovation to boost their bottom line and reduce emissions.

The oil and gas industry bets on digitalisation and innovation in exploration, drilling, and production, using the latest tech advances to ensure safe and continuous operations. The energy sector is also looking to incorporate the latest innovations to bring down emissions from operations as many firms, including the biggest European oil majors, have pledged to become net-zero energy businesses by 2050.

Innovation helps energy firms close the gap in net-zero technologies and boost domestic resource development.

North Sea – ‘A Vibrant Hotbed of Technology Innovation’

A recent report from the UK’s North Sea Transition Authority (NSTA) found that digital applications and solutions aimed at reaching net zero are driving technology growth in the North Sea, which, the authority says, “remains a vibrant hotbed of technology innovation.”

The triple targets of supporting current oil and natural gas production, reducing emissions, and accelerating the transition to net zero are driving technological innovation in the North Sea, NSTA said in its 2023 Technology Insights report earlier this year.

The authority gathered information from 55 UK North Sea operators about the technologies they have already installed and their efforts to identify solutions which could enhance operations in future.

“There was strong evidence of a continuing focus on technologies for the effective and cost-efficient development of remaining hydrocarbon resources, complemented by efforts to reduce emissions,” NSTA found in the survey.

The report shows that 1,200 new technologies, including aerial drone and self-driving subsea vehicles, have been reported in the latest survey, up from the 1,080 developments recorded the previous year, and 880 in 2021.

Innovations in digital applications and Net Zero technologies have jumped in recent months. Net Zero technologies have risen from 61 in 2021 to 140 in 2023, and the number of Data and Digital technologies has grown from 190 to 381 in the same time period, the survey found.

Facilities management technologies, including deployment of aerial drones and autonomous underwater vehicles to monitor equipment remain the single largest place for innovation, while there has been significant growth in the innovation in installations and topsides, and reservoir and well management, NSTA noted.

Other areas are seeing innovative thinking, too, with exciting new ideas implemented in seismic surveying and exploration, well drilling and construction, subsea systems, well P&A, and facilities decommissioning.

“The North Sea is full of opportunities related to hydrocarbons and net zero, but at the same time can be a difficult place to work. Operators must focus on finding solutions to many challenging problems,” said Ernie Lamza, NSTA Technology Manager.

“World-leading technologies, skills and experience boost production and support the energy transition, placing UKCS workers and companies in a great position to secure work and deliver products and services in the UK and in other producing regions around the world.”     

Notable examples of innovation in drilling and well construction include low-cost platform modular drilling rig systems,lightweight compact trees, thru-tubing isolation barrier valve, and digital well planning using AI, according to NSTA’s report.

In facilities design and inspections, operators are innovating with cost efficient pipelines and longer tie-backs, subsea gas compression and multiphase boosting,compact and effective fluid separation, and non-intrusive inspection technologies, controls and automation.

Well intervention is seeing innovative technology in wireless downhole surveillance technologies,disposable fibre-lines, retrofit DHSVs and ESPs, and water shut-off solutions.

Last but certainly not least, in the area of emission reduction, operators are deploying innovative technology for enhanced emissions monitoring, including fugitives and flare efficiency, vapour recovery systems, and electrification of platforms.

In terms of technology uptake, NSTA’s survey found that more than half of the technologies are sourced directly from vendors and/or suppliers, but in over 30 percent of the cases, operators actively partner with selected suppliers to develop solutions in partnership, and/or form joint industry projects.

In addition, there has been a visible contribution of the Net Zero Technology Centre (NZTC) in supporting and facilitating technology innovation, in 10 percent of overall technologies surveyed, NSTA noted.

Global Uptake of Innovation

Innovation and technology go beyond the North Sea to the entire energy industry globally, which is striving to improve operating performance and deploy technologies that would help it cut emissions.

Technology adoption is one of the key trends to follow in the oil and gas industry in 2024, consultancy Deloitte said in its 2024 oil and gas industry outlook earlier this year.

“The energy landscape continues to be shaped largely by four disruptors: geopolitical factors, macroeconomic variables such as high interest rates and rising materials costs, evolving policies and regulations, and the emergence of new technologies,” Deloitte partners and research leaders Amy Chronis, Kate Hardin, and Anshu Mittal wrote.

In the field of technology, artificial intelligence (AI) has the potential to be a transformative force for the industry, with applications across the value chain, ranging from initial resource exploration to refining, according to Deloitte.

Generative AI is now all the craze in many industries, not only oil and gas. This innovation, the next frontier of technology, could help the energy industry cut costs, boost efficiency of processes, create new revenue streams, and accelerate company-wide innovation, the consultancy noted.

For example, predictive maintenance has a significant value for an oil and gas organisation as it could lead to immediate cost reductions. AI and other related technologies could also optimise drilling operations, make value chain management more efficient, and introduce virtual assistance to boost process efficiency, Deloitte reckons.

Generative AI could also create more value by expanding revenues thanks to optimisation of exploration and reservoirs and of refinery processes. Finally, this technology could accelerate further innovation in material design and oilfield services, Deloitte analysts say.

“Harnessing value across these dimensions using generative AI can enhance operational sustainability for O&G companies through carbon emissions monitoring, energy efficiency optimization, and waste reduction while also predicting emission intensities across their supply chain,” they wrote.

According to EY, “the adoption curve for AI is faster than for any other technology so far, so companies must act quickly.”

The oil and gas companies that look to maximise operations, proactively manage emissions, and embrace new energies will be positioned to thrive in the coming decades, say Patrick Jelinek, EY Americas Oil and Gas Leader, US West Energy & Resources Market Segment Leader, and David Kirsch, Managing Director, Energy, Ernst & Young LLP.

AI in the oil and gas industry is expected to be valued at $3.5 billion in 2024, with the market set to reach $13 billion by 2034, Future Market Insights said in a report in February.

Between 2019 and 2023, the AI market in the oil and gas sector jumped by 17 percent each year, and is expected to grow at a 14.1-percent rate every year over the next ten years, according to Future Market Insights.

The need to optimise production and cut costs, safety and environmental impact reduction, and the exponential growth in data from sensors and other data-gathering technologies will be key growth drivers of AI adoption in the oil and gas industry, FMI said.

“The sophistication of AI technology and its potential to deliver increased assets itself is driving its adoption in the oil and gas industry,” says Nikhil Kaitwade, Associate Vice President at Future Market Insights, Inc.

“As AI becomes more affordable and reliable for several industries, they can address increasingly complex problems and deliver more accurate predictions and recommendations even in the oil and gas sector.”

Read the latest issue of the OGV Energy magazine HERE