Technology Insights 2020 – Summary findings
NSTA analysis of data submitted in the annual stewardship survey and the Technology Plans allows delineation of emerging trends related to industry focus on technology across the asset lifecycle, technology maturity, sourcing of technology, supply chain engagement and operator technology spend.
This consolidated view of technology deployment by operators is an important indicator of the state of the industry to meet current needs and to highlight priority areas of focus to help prepare for the future.
Technology focus and UKCS priorities
Since the NSTA began the annual Technology Plan survey in 2017, there has been steady growth in the total number of operator reported technologies either in use/planned to be used or identified as a “need”
- In 2020, 880 technologies were referenced by operators in their submissions, more than double the number from 2017
- The distribution of technology activity across the eight categories gives an insight on where across the asset lifecycle industry is focussing efforts to leveraging benefits from technology development and deployment
- The proportion of technologies related to exploration and field development activity has remained relatively constant except for Well Drilling & Construction which has reduced by nearly a third
- Production operations related activities accounted for the greatest proportion of technologies reported (45% of total)
- Facilities management is the only category showing significant growth in number of technologies driven by increased focus on Maintenance and Operations activities
- Reservoir and Well management continues to be a key focus area for operator technology activity
- Decommissioning of both wells and facilities consistently shows muted technology interest and a reduction in activities reported since 2017
- If this trend persists, the availability of technology options to deliver operational performance improvement and help reduce decommissioning costs could be limited.
- Further analysis of the technology trends within the eight categories can be accessed using the following links
|Seismic and Exploration|
|Well Drilling & Construction|
|Installations and topsides|
|Reservoir & Well Management|
|Well plugging & Abandonment|
The NSTA has identified a set of 6 priority areas for industry focus where support for further development and/or deployment of technologies at scale has potential to address ongoing and future UKCS challenges
|Technology Priorities||Resource maturation||Net Zero|
|1. Ocean bottom seismic||✓||✓|
|2. Fibre and wireless surveillance||✓||✓|
|3. Flaring and venting monitoring & abatement||✓||✓|
|4. Non-intrusive integrity inspection & monitoring||✓||✓|
|5. Alternative P&A barriers||✓||✓|
|6. Subsea decommissioning||✓|
Operator SE08 submissions also provide useful insights to industry patterns on the state of technology utilisation and development.
- Data on the maturity stage of the technologies included in the operators submissions shows that they are increasing relying on established technology to meet their technology needs. Established technology currently provides over 50% of operator solutions, although this increases to over 60% in Exploration and Wells activities. Subsea and Well P&A are the only areas where operators indicate that they are more reliant on technology solutions at earlier stages of maturity with established technologies only accounting for ~ 30% of solutions.
- Technology at early commercialisation stage continues to provide a significant contribution, however, the data indicates a general reduction in the proportion of technology reported to be coming through early and late development stages. In particular operators are indicating early development stage technology is playing a lessor role in their technology plans.
- Without further operator focus on emerging technologies, these trends imply that the reliance on established technology to meet industry needs will likely continue as the earlier stage technologies coming through the solution pipeline continue to mature.
Maturity of technologies reported by Operators
Analysis of operator submissions also yields useful information on technology sourcing and role of the supply chain, industry organisations and academia in the provision of technology solutions.
- Operator reliance on vendor solutions has increased markedly from 40% in their 2017 technology plans to over 65% in the most recent survey
- Collaboration continues to play an important role in technology provision, however, with partnership with the supply chain, participation in JIPs and growing involvement in
Net Zero Technology Centre programmes all contributing.
- In-house development is shown to have shrunk which may also reflect changes in the types of operator active in the basin
- A notable omission in the operator plans is reference to technology sharing from other industries which could be useful resource e.g. asset integrity and digital applications
Vendor investment in technology is not directly reflected in the operator reported spend therefore it is not possible to assess to what extent the increased reliance on the supply chain has or could translate into investment in new technology. The increased use of existing technologies by operators possibly reflects a gap in emerging technology due to the impact of challenging sector economics in recent years on both operator and supply chain sectors and changes in operator profile on the UKCS. However, a pattern of continued dependence on existing technology could also act a deterrent to new technology investment and development unless the increasing role of the supply chain in technology provision is also given the stimulus to invest to meet the emerging technology needs of the UK oil and gas industry through the energy transition.
Technology delivery plans
Operators Technology Spend
Operators submit information to the NSTA on the level of spend relating to the deployment of technology through the Stewardship Expectations SE08 annual returns.
Operators are required to report spend relating to R&D (in-house, external and sponsored) and Total Technology spend. The difference between the two represents ‘field’ Technology Transfer spend utilising emerging or existing technology to provide solutions.
Reported technology spend
- Returns from 112 UKCS operators have been reviewed over a 5 year period from 2017-2020
- R&D spend consistently accounts for about a third of the Total Technology spend
- Overall, operator technology spend has declined over time although the number of technologies reported has more than doubled
- A near 30% drop occurred after the 2014 oil price crash and despite a rebound in 2018 due to oil price recovery spend, continues to reduce
- Spend is concentrated with few operators (~ 10 operators account for ~ 90% of Total Technology spend)
Total technology spend by operator (2019 act.)
- The exit of two international majors in 2018/19 led to ~ 30% drop in total technology spend, only partially offset by new entrants / asset owners
Impact of industry turnover on technology spend
The 2020 returns indicate that spend by category also follows the operator activity focus on Asset Management and Exploration and Well Construction. This implies operator commitment to activities that directly contribute to delivering production.
- Despite Facilities Management being the largest activity category, the comparatively low spend likely reflects in part the high cost of exploration, drilling and well management.
- The low level of combined Well P&A and Facilities Decommissioning spend mirrors the comparatively lower focus by operators on Decommissioning activity.
The technologies referred to in this report are for illustrative purposes only and other technologies may be available. The NSTA does not directly or indirectly endorse, recommend or guarantee any entity, product or technology referred to in this report.