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TheBusinessOnline: Oil price surge inspires technological revolution

By Richard Orange
23 July 2006
 
Technology tends to be a trump card for those who argue oil and gas scarcity is an illusion. While some worried geologists fear oil production will peak, say, next year, their opponents – most of whom are economists – argue higher prices will spur new technologies that will inevitably bring new oil and gas reserves to market.

But while exploration is now increasing, Dave Pratt, at Aberdeen’s Offshore Hydrocarbon Mapping, says his own electromagnetic imaging system is more or less the only transforming technology he’s aware of. OHM uses the different resistivity of water and oil to distinguish which of the two is trapped in geological formations revealed by seismic surveys.

OHM has just completed a survey for Rockhopper Exploration that should determine with near certainty if its targets off the Falklands Islands contain oil and justify bringing an oil drilling rig to the remote region.

Pratt says the oil industry is slow to adopt new technologies. Past developments, such as three- and four-dimensional seismic surveys, have taken up to 10 years to become widely used, compared with a two-year average in other industries.

New technologies tend to follow oil companies as they move to explore in new environments. The high oil price will make deep-water exploration economic for the first time.

It is only when companies first start to drill wells that oil rig companies will start to develop the technology to make it possible.This time around, it’s likely to be drilling in the Arctic, in particular in places which are permanently ice-bound.

For now though, the most innovative technologies developing in response to the high oil and gas prices seem to be more in the delivery and exploitation of oil and gas that’s already been found rather than in exploration. Gas-to-liquids, which turns natural gas into ultra-clean diesel, is starting to take off. And Excelerate Energy intends this December to deliver cargos of liquefied natural gas (LNG) to the UK market using a ship which itself turns the LNG back into gas, delivering the gas directly into the pipe network at Teesside, and potentially saving hundreds of millions of pounds on regasification plants.

There are also plans to develop small-scale LNG, Compressed Natural Gas (CNG) and Gas to Liquids (GTL) plants.

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