It is not the purpose of this piece to delve into the battle that eventually led to the UK’s £180million Oil & Gas Technology Centre being formally opened in Aberdeen in February.
Rather it is to provide OGTC’s CEO Colette Cohen with an opportunity to explain how she intends to take the organisation forward in what remain tough times for the UK Continental Shelf especially.
The claim is that the OGTC will help unlock the full potential of UK offshore oil & gas resources and help to better realise the perhaps latent potential of the supposedly world-class supply chain based in the British Isles and especially the huge cluster in the Scottish northeast.
Initial objectives include seeking to halve the cost of drilling wells, reduce maintenance costs by as much as 50%, and unlock up to 3billion barrels of oil especially that currently stranded in “small pools”, most of them within tie-in distance of existing producing assets.
OGTC is born of a crisis and, sooner or later, the industry will have to step up to the plate with money from its own pocket. For now, however, it is taxpayer’s money that is underpinning early stage strategising and activities.
And in the hot seat, tasked with driving the initiative forward is hugely experienced Colette Cohen, who took up the reins in September last year.
She has served in a variety of front-line top management roles, latterly in The Caspian Region (ConocoPhillips) and, most recently, the North Sea (BOL through ConocoPhillips and then Centrica).
But why Cohen, why this initiative in the first place and why now?
Cohen: “Why me? I have a good strong track record in the industry … over 25 years’ experience of which quite a number were spent in technology development.
“Chemistry is my primary degree with a second degree in project management and economics. It’s a good fit. I’m bringing operator experience … not only the operating needs of the North Sea, but I have worked in multiple other locations.
“Why now? I recognise that lots of people and myself too have said we wish we’d done this 10 years ago.”
What, not 25 years ago when there was this great drive in the 1990s through CRINE and CRINE Network where operators acknowledged that there was a lack of what they really needed to claw the North Sea back out of the depression it was still in after the 1986 crash?
“But today what we’re talking about is why now?” replies Cohen. “So what I’m answering is the fact that you’ve got a period when we’ve had quite low oil prices; the industry does everything it can with respect to headcounts and efficiency and production improvement.
“And they’ve got to the point where they recognise two key things.
“One is that it’s going to be really difficult to deliver a change in how we work … behaviours.
“The second is the need for technologies to unlock some of the opportunities that they still have in the portfolio.
“And, for the first time, we have a reasonable amount of money being given by the UK/Scottish governments and their commitment to back and support us.”
Energy has made this observation before. During a crisis, companies classically pull in their horns. They cut budgets and ride it through. In the MBA classroom one is advised that the time to push your business forward is from a position of strength when times are good. That includes technology development.
But then think of World Wars I and II and the huge technological changes that they drove. That begs the question: ‘Do we really need a crisis to drive change in an industry like oil & gas?’
Cohen: “I don’t know whether we need a crisis to drive it. I think we are benefiting from a crisis situation. You’re suggesting that we need a crisis. I’m not saying that I believe we need one. I believe that that’s where we are and I’m accepting that that’s where we are. And we’re using it to our advantage.”
Building something new is tough; how does one structure something like OGTC for success? It’s something that Cohen appears to have nailed down, judging by the response and from materials on the organisation’s website.
It is focused on four main areas; but within each are mapped out key priorities for delivery through so-called solutions centres.
Cohen: “The key priorities at the solutions centres come in a number of ways.
“One is clarifying key activities within each of the solutions centres because they’re so big you could spend your first five years pottering around trying a little bit of everything, which would be of no use to any of us.
“The first priority is really identifying what are you going to go after in each of the solutions centres and then developing a plan to do that.
“The second is getting a series of both SMEs, tier one contractors and operators to support you in that. You can’t bring everybody along. And if you try to make this a consortium of the North Sea it will fail.
“You have to bring the enlightened to show what you can do and then deliver against that. And so the priority is to set up a series of short-term and long-term projects and get some early wins and some field trials within the next year to 18 months, and show what can be done to make a difference in the solutions centres.
“We then have the centres of excellence to which the keys are agreeing and identifying what the first centre of excellence will be, then framing that up, a business case built and getting the partners that you need to work with.
“We’ve identified field life extension and decommissioning; we have agreed it and signed it up with Robert Gordon and Aberdeen universities and we’re currently working on identifying the key companies that partner with us to create that centre of excellence. We want to get the first phase of the centre by the end of this year; recognising that some of it might be quite a decent sized footprint, so that may take longer.”
The third pillar of the OGTC is the innovation hub within its HQ building in Aberdeen, described on its parent’s website as “a focal point for collaboration both within and outside the industry, with the UK and global oil & gas innovation centres, and with Catapults, Innovate UK and others”.
Cohen is keen to get this forum motoring this year and that it buzzes, inspires and oils the wheels of collaboration. She wants a forward plan carrying through next year as soon as possible and that the hub helps enable companies to see what’s already out there. It’s a kind of oil & gas science centre for industry professionals.
“This is so we stop reinventing the wheel, because we have historically not looked outward enough and one of our big focus things is to bring the outside in,” she says.
“That’s why we’re spending time with the aviation and automotive industries, people like 3M, the digital catapults, the renewable catapults … looking at what everybody else is doing … even the military.
“An accelerator programme (like this) is so unusual and so different for our industry. Our aim is to accelerate up to 100 technology oriented companies over the next 10 years.
“However, the question there is how to run that effectively because we already have an investment community and we’re not here to do equity. It is a challenge to find the right model and the right person to lead that.”
So how might the OGTC mesh with Scottish Enterprise and other economic development bodies?
Cohen: “I think we’re lucky that we have both Maggie McGinley (head of energy at SE) as an observer on our board and Mike Fleming (a former SE energy senior) on our board. And I think what we’re already seeing with some of the companies coming through is that they need business skills (an area where SE can assist).
“Our aim is that we intend to partner either with Elevator or Scottish Enterprise depending on the maturity of the companies and they will help on the business side while we work on unlocking the technology in partnership. This is the only way I see it working effectively.”
One of the perennial worries of small technology companies is that, while some receive help to get some way up the ladder, it seems that many hit a brick wall with operators … can’t get technologies trialled downhole or whatever.
Go back to the 1990s and there were initiatives like the IDDTC with its suite of three wells and which in its original form failed. It was supposed to help downhole-related SMEs overcome such problems.
It is just one example of R&D test facilities built with public money over the years that basically did not achieve objectives originally set. Also, it was easier to get technologies trialled on the NCS than the UKCS. But what’s the picture today?
Cohen: “You don’t get to be on our books unless we can match you with a tier-one contractor or operator that is commissioned to bring you all the way to field trials.
“We’ve been really fortunate; seven or eight operators have already stepped up to do field trials.”
However, according to Cohen, one historic reason why operators have often been reticent is because fingers have been burned, with some technologies brought to their attention not living up to their description.
Plus, one of the biggest challenges of getting technologies deployed is certification and validation.
“Indeed one of the first projects we’re kicking off is with that in mind, including to really understand what’s involved with certification because I think there’s a lot of confusion about what is or is not required,” says Cohen.
“We need to identify what is genuinely required from the UKCS rather than global. For example, API is global, which is not required here.”
Another challenge confronting Cohen and her growing team is what else is out there in terms of test facilities … not just in the UK but worldwide and not necessarily just oil & gas. And what gaps can be filled, such as valve testing in the UK instead of having to travel to Houston or some other major centre.
“We’ve already been down to places like Fort William and Blythe and we’ll keep at it until we’ve tracked all of them down. Even HSE labs have an amazing capability for some of the stuff that we might want to play with.
“It’s not a quick fix; it’s not something that we can do in a month or two, it’s going to take a couple of years. But, in the grand scheme of things it can literally transform how we bring technology to the North Sea. So that’s a big focus for us.”
As has been made abundantly clear, universities have a major role in helping OGTC drive the next generation of oil & gas technologies forward and some like Heriot Watt are already very good at it. Indeed they are probably pivotal. So too are other initiatives such as industry innovation “catapults”.
However, in the past and without name dropping, universities didn’t always deliver to industry clients what they thought they were paying for; rather the funding was frittered away on pet research projects and not the commissioned R&D. But Cohen reckons she’s got that covered.
“All of our projects will have gates and check-ins. If they’re not delivering what we’re looking for in the time we require then the money will simply be stopped. I think that’s the most powerful tool you have with the universities.
“There are great skills in a number of the Scottish universities, let alone the English ones. If you go to Heriot Watt for example, some of the things they’re doing with robotics and digital is phenomenal. I don’t think we should underestimate or downplay the capabilities of our universities.
“Yes, there may be challenges in making sure that they stay focused on a business schedule, but that’s where we need to work with them. I think the amount of investment that some of them have made in key skills is something we should leverage.
“But I think that if you also look at the catapult models, they have shown how efficient they can be and how quickly they can deliver things.
“So there is a super organisation network already in existence here in the UK that that can be called upon that we haven’t really used as an industry.”
To sum up, Cohen is at the helm of an initiative widely regarded as a vital ingredient for the future health of the UK’s offshore energy industry … for it is more than oil & gas and Cohen is keen to recognise that there is a huge low carbon transition under way that will eventually touch every comp any in the offshore supply chain. Either go with the flow or risk failure.
“I said this about four years ago … I felt at that point that we had the potential to become the coal industry if we didn’t recognise it, step back and started changing ourselves. I believe we have since taken that step back,” she says.
And the roughly counterpart organisation that she thinks best exemplifies what she wants the UK’s OGTC to achieve. It turns out to be Sintef of Norway.
“We have an aspiration to serve the industry in the UK in the same way, something like Sintef does in Norway.”