Innovations 27 2015

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I N N O V AT I O N S • V O L . V I I , N O. 3 • 2 0 1 5
OVERCOMING TOMORROW’S INDUSTRY CHALLENGES TODAY
In the face of falling oil prices, it is no surprise that confidence in the outlook
for the global oil and gas industry has taken a hit. More surprising though was how
quickly sentiment changed in a short space of time; the confidence of over 360
senior industry professionals and executives dropped from 65 percent in October
2014 to just 28 percent in January 2015. The findings come from DNV GL’s report, A
Balancing Act: The Outlook For The Oil And Gas Industry In 2015.
The pessimistic outlook was also reflected in capital expenditure (CAPEX)
intentions, with those planning to increase CAPEX in the same time period dropping
from 40 percent to 12 percent.
While investment in technology and innovation will remain a priority for many oil
and gas firms in 2015, a significant proportion will struggle to maintain last year’s spending levels. Almost half (45
percent) expect investment in R&D to stay the same during 2015, while the number of those planning to cut R&D
investment has more than tripled since last year (up from 11 percent to 37 percent).
To adjust to this lower-margin environment, industry players need to develop a long-term sustainable cost
base. This can be done by taking a broader view, reducing complexity and standardising processes, materials and
documentation. We need to work together, and industry standards and guidelines must adapt to industry needs and
the advance of new technologies.
As an independent technical partner and adviser, DNV GL - Oil & Gas works with the industry to address these
issues. The company has 5,500 oil and gas specialists and 22 laboratories and R&D centres around the world and
this year we have initiated over 60 new joint industry projects (JIPs). Several of these address challenges the pipeline
industry faces around the world.
One such example is a JIP run from DNV GL’s laboratories in Singapore and Columbus, Ohio. Eight participants
have so far joined forces with us to develop a method to evaluate fractures and cracks using a Single Edge Notched
Tensile (SENT) test designed for sour service environments. Sour gas puts significant demand on pipeline material,
particularly in deeper water. It is evident in various oil and gas producing regions of the world, in particular, the
Middle East and the Commonwealth of Independent States. The JIP will enable the development of a guideline which
is likely to develop into a Recommended Practice to
help provide significant technical, logistical and financial
savings to the industry.
Arve Johan Kalleklev
REGIONAL MANAGER, SOUTH EAST ASIA, DNV GL – OIL & GAS
Industry Commentary from Around the World
Download a complimentary copy of A Balancing Act: The Outlook For
The Oil And Gas Industry In 2015:
ROVs at work on a subsea pipeline.