Research identifies critical technologies for oil and gas in a transforming decade

Published: 13 December 2019

• New DNV GL research identifies which technologies will help the sector to meet efficiency, decarbonization, and safety challenges over the next decade

• Technology Outlook 2030 predicts the emergence of a digital oil and gas value chain powered by machines and software algorithms

• Subsea facilities will become increasingly all-electric, with huge capital cost savings for field developments

• Adoption of low-carbon energy carriers, such as hydrogen for heating and transport, will accelerate

The acceleration of digitalization (Figure 1), and growing global pressure over climate change, are among the biggest uncertainties facing corporate and political decision makers over the next decade. Industries including oil and gas face unprecedented ambiguity when deciding which technologies matter, what technology trends should be closely monitored, and how businesses and society can optimally use them in the lead-up to 2030. 

New research published by DNV GL aims to help by identifying technologies that can: enable and foster other technologies; transform key industries; and, sustain natural ecosystems. 

Technology Outlook 2030 suggests that the world may be in ‘technological bliss’ or suffer a ‘missed opportunity’ by the end of the next decade. The outcome, it argues, will depend on whether the rapid evolution of technology is matched by appropriate organizational, behavioural, institutional and regulatory change, as well as industry standards for leveraging technologies to protect people and the planet alongside creating value.

“The world is facing complex choices about the energy transition, privacy, security and ethics in the digital age,” said Kristen Ulveseter, project manager, Technology Outlook 2030. ”Understanding the risks as well as the benefits that technologies can bring is vital. Industries have a key role to play in developing technology, but national policies and global governance have arguably never mattered more when it comes to encouraging and supporting the scaling up of technologies for positive societal and environmental benefits.” 

Keeping oil and gas relevant in the energy transition 

The Outlook warns that the world is not on track to meet UN Global Goals for sustainable development, or the COP 21 Paris Agreement upper target for limiting global warming. One Global Goal is to ensure universal access by 2030 to affordable, reliable, and modern energy services. The oil and gas industry is stepping up its focus on the efficiency and decarbonization of its value chain to be part of that future. It is one of five sectors for which Technology Outlook 2030 includes special focuses on the impact of technology trends; the others are maritime, power and renewables, food, and health.

“Addressing the oil and gas industry’s efficiency, decarbonization, and safety needs will help to solve the global energy trilemma: how to provide a secure supply of affordable, decarbonized energy for the long term (Figure 2),” said Dr Frank Børre Pedersen, programme director – oil and gas, DNV GL Group Technology and Research.

“Our modelling¹ suggests the world will need new oil and gas developments, and life extension of existing fields, to meet demand for these fuels through to 2050,” he added. “Technologies identified in Technology Outlook 2030 will help to make a case for such investment.”

The Outlook examines technologies that will or could be part of a sustainable response to a complex range of drivers for the sector. The drivers include market forces, regulation, societal concerns, and the need to integrate with power and renewables in energy grids. The technology trends discussed in greatest detail include: digital value chains; electrification offshore, subsea and subsurface; and, hydrogen as an energy carrier.

A digital value chain will be powered by machines and algorithms 

The Outlook outlines how machines will continue to replace people in oil and gas operations, as traditional improvements involving automation, robots, and software modelling are further blended with novel digital opportunities. The opportunities will come from sensor data, virtual and augmented reality, artificial intelligence (AI), and advanced use of simulation models and virtual testing. Assets are no longer purely physical or digital: their performance will only be understood and optimized by considering them as cyber-physical systems.

“With digital technologies accelerating and enabling the development of other technologies at a pace never seen before, the oil and gas industry needs to seize technology opportunities to boost its efficiency and reduce its carbon footprint to retain its relevance in the energy transition,” said Liv A. Hovem, CEO, DNV GL – Oil & Gas. “And of course, we need to make sure that these digital technologies work as expected.”

Technology Outlook 2030 sees digitalization offering significant benefits to the capital-intensive oil and gas industry by enabling:

• more efficient projects and operations 
• greater collaboration by sharing data and models through cloud platforms 
• new business models for value-chain efficiencies 
• greater supply-chain transparency to meet increased regulatory and public scrutiny. 

The Outlook predicts a merging of project management and operations by 2030 into a digital value chain powered by machines and algorithms. 

Digitalization will improve the capital value process 

Exploiting digitalization can improve the efficiency and success of exploring for oil and gas, appraising discoveries, and developing infrastructure to produce and transport the hydrocarbons. Relevant tools include cloud computing, advanced simulations, virtual system testing, virtual/augmented reality and applications of machine learning, a subset of AI. 

“We expect tools like these to merge progressively in full digital twins combining data analytics and real-time data on installations, subsurface geology, and reservoirs,” said Pedersen. “Creating a digital twin early in field development allows simulation and visualization of its lifecycle. This can help to choose development concepts and make major development decisions, such as the number of wells.” 

This in turn allows better and early optimization of technical designs, production strategy, and commercial models, he added: “Standard designs can be reused from a best-practice library of geometries with automatic configurations, equipment catalogues, and weight and capacity estimates calculated automatically. Technical requirements guiding construction can be checked automatically to ensure designs comply with requirements.” Finally, Pedersen said, the (unconstrained) reservoir production profiles for oil, gas, and water can be simulated through the different potential development concepts to forecast actual production throughout field life. 

“All of this enables a virtual step-through of the asset lifecycle at the desktop before development starts. We call this the digital value chain, with the digital twin at its core. Operators and contractors have parts of it in place already, and we expect it to be a full reality before 2030 as a necessity for reducing development times and costs in the energy transition.” 

Electrification will go offshore, subsea, and down into the well 

Gas turbines fuelled by gas from the wells are the usual power source for oil and gas platforms, and account for some 80% of carbon dioxide (CO2) emissions offshore. Using clean electricity for all or some of a platform’s power could reduce the carbon footprint of operations therefore. 

Some platforms receive power currently by subsea cable from shore, but full electrification offshore will require new power infrastructure. Technology Outlook 2030 notes that high-voltage direct current power transmission systems may be needed for long distances, requiring transformers onshore and offshore, which is costly. Alternative ways of providing renewable power locally to platforms are being considered, including offshore windpower projects. 

The Outlook expects electrification offshore to have the most impact underwater. It notes that electric and electronic applications for subsea control systems, choke valves, and production valves have proved highly reliable, and have focused so far on production parts of subsea systems. Safety-critical parts, including Xmas trees and downhole safety valves (DHSVs) still operate by hydraulic power from the topside. Hydraulics are costly to install and maintain, which the Outlook sees as good reasons to replace them with all-electric systems in which the main elements will be Xmas trees, DHSVs, and subsea modules. 

While cost-efficiency is seen as the main driver for all-electric subsea solutions, other advantages include removing topside high-pressure equipment (a safety risk to personnel), and eliminating the risk of hydraulic fluids polluting environments. 

Hydrogen value chains will grow  

Combusting hydrogen, or using it in a fuel cell, emits no greenhouse gases (GHGs). Consequently, national initiatives worldwide are assessing the technical and economic viability of scaling up hydrogen production for safe industrial and societal use. It could even heat entire cities which, the Outlook reports, will account for some 80% of global energy-related GHG emissions by 2030. A chapter focusing on cities notes that they are placing decarbonization of heating high on their agendas.

“We believe that engineering can overcome the safety issues associated with hydrogen production, transportation and consumption. In our view, the main challenge is being able to create low-carbon hydrogen value chains with economic potential to scale globally,” said Pedersen. “We expect blue hydrogen, made by steam methane reforming of fossil fuels with carbon capture and storage (CCS), to become a low-carbon option where gas infrastructure or industrial demand already exist. More globally, green [zero-carbon] hydrogen from electrolysis powered from renewable generating sources may drive transport, in particular the heavy-duty segment, including trucks, trains, and some ships.” 

For both the oil and gas and power sectors, Technology Outlook 2030 suggests that growing pressure to reduce the carbon footprint of their production and products makes blue hydrogen an attractive alternative. It warns that failure to deploy hydrogen and CCS at significant scale can strongly impact on how natural gas is perceived as a bridging fuel in the energy transition. 

Two thirds of captured CO₂ currently comes from natural gas processing. In addition to this capture, the Outlook expects three future uses of CCS technology in the energy system: in hydrogen production; for removing CO₂ emissions at gas- and coal-fired power plants; and, for CO₂ emission mitigation in industrial processes (e.g. petrochemical, cement, waste-to-energy). 

“The oil and gas industry is well positioned to take a large position in the hydrogen value chain. It has major stakes in gas transport infrastructure, liquefied natural gas facilities and terminals, natural gas storage sites, and CO₂ storage operations. Given that industry has the capabilities, and society the needs, we anticipate growth locally and globally in hydrogen value chains towards 2030,” said DNV GL CEO Liv A. Hovem. 

Download a complimentary copy of DNV GL’s Technology Outlook 2030 

References   

1 ‘Energy Transition Outlook 2019’, DNV GL, September 2019  

Further reading 

• Machine learning can make mooring safer and more cost effective
• New digital twin concept could show real-time status of safety risk and operations 
• Can 'printed' parts make oil and gas operations smarter and greener? 
• DNV GL supports Equinor with verification study for Hywind Tampen floating wind farm 
• Making wind powered water injection a commercial reality

Disclaimer: 

DNV prides itself on providing accurate information but makes no claims or guarantees about the accuracy, completeness or adequacy of contents in this publication, and disclaims liability for any errors or omissions. The authors’ views here do not necessarily reflect DNV’s views.