Need for innovation

The oil & gas industry’s ever-increasing need for innovation will compel companies to invest in technology development, and the pace of innovation will differentiate companies from each other.

Oil & gas industry has been the back-bone of India’s economic growth resurgence over the past one decade, with the country’s oil refining capacity expected to rise 24 per cent to about 267 million tonne by 2015-16. The oil & gas sector meets more than two-third of the total primary energy needs in the country. The sector has been instrumental in putting India on the world map. At present, India is the sixth largest crude oil consumer in the world and the ninth largest crude oil importer.

The industry boasts of some big names in both public and private sector enterprises, which are competing with the oil giants of the world through significant oil discoveries and capacity expansion exercises being undertaken over the last few years. The three pillars of the oil & gas industry – upstream, mid-stream and downstream, have made significant upgradation in technologies, allowing them to operate in a more seamless manner in today’s fast changing world. Keeping in tandem with the changing dynamics in the oil & gas industry, domestic oil & gas companies, too, have continued to strive for technological development to bridge the burgeoning gap in the demand and supply of primary energy.

India has shown remarkable resilience given the lingering effects of economic slowdown, as the hydrocarbon sector, especially, witnessing hectic research and development (R&D) activities in the past one decade.

Further, tax exemptions from the Indian government and availability of cost-competitive cutting-edge skills has also helped the country position itself as an R&D hub, with the likes of Shell, Castrol, Siemens, etc setting up R&D centres. According to the International Energy Agency (IEA), in 2011 India had approximately 5.7 billion barrels of proven oil reserves, the second-largest amount in the Asia-Pacific region after China, primarily light and sweet crude. While India’s domestic energy resource base is substantial, the country relies on imports for a considerable amount of its energy use. According to the IEA, hydrocarbons account for the majority of India’s energy use. Upstream oil companies need to invest more in such R&D activities to commercialise new and innovative technologies, and substantial R&D efforts from Indian upstream majors are underway.

Significant technology development in the area of horizontal drilling and hydraulic fracturing has ensured commercial viability of unconventional resources such as shale gas. Several initiatives are being undertaken by upstream companies to enable sustainable exploitation of difficult finds and increase the maximum recovery from traditional fields.

Oil exploration firms are engaged in structural characterisation of gas hydrates using Raman Spectroscopy. Exploration firms are also doing soil classification and evaluation of soil design parameters using PCPT data with emphasis on application in Indian waters.

Further, well completion, artificial lift system, sand control, water shut off and simulation coupled with deep water production and subsea technology and surface geochemical exploration using adsorbed Soil Gas Method are being considered. Upstream companies are also developing indigenous bacterial strains for microbial enhanced oil recovery (MEOR) process and microbial paraffin/wax remediation.

Apart from conventional hydrocarbons, Indian majors have also made foray into coal to liquids (CTL), use of tertiary coals for hydrogenation and phytoremediation of crude oil and oily sludge-contaminated soil, replacing natural gas-based heating of crude at heater treater by a combination of solar and natural gas-based heating combination, etc. Changing fuel demand patterns necessitates technological changes in the downstream sector, and therefore, refining capacity addition planned across the globe will continue to demand innovative technologies to meet the challenges. In-house developed technologies are testimony of its growth and commitment to oil and gas sector. INDMAX technology developed by Indian Oil is capable of converting heavy distillate and residue into LPG/light distillate products and it has been implemented successfully at Guwahati and Bongaigaon refineries. This technology is under implementation in Paradip refinery for production of petrochemical feedstock viz ethylene and propylene from vacuum gas oil (VGO).

Indian downstream companies, which have developed new technologies include hexane hydrogenation process for production of food-grade hexane (WHO grade quality) with indigenous catalyst, diesel hydro-treatment technology and isomerisation technology for meeting gasoline quality requirements etc. Several R&D efforts within the lubricant technology include development of lubricants, greases and specialties, as well as boundary lubrication, metalworking tribology, specialty bituminous products and fuel additives. Besides, significant research efforts are under¡way for alternative fuels such as hydrogen, hydrogen-CNG, bio-diesel, second and third-generation bio-fuels, solar energy, biotechnology, nanotechnology and petrochemicals and polymers. Finally, the mid-stream (pipeline transportation) segment has also played a key role in the oil & gas space, as they link production centres with consumption centres for crude oil, natural gas and finished petroleum products.

R&D in the area of hydrocarbon pipeline has also attracted the attention of Indian downstream majors and the current activities includes development of intelligent and caliper pigs for transportation of crude and petroleum products through pipelines, pipeline monitoring, corrosion inhibition etc.

The areas demanding technology intervention to improve business performance include pipeline monitoring for real-time warning of proximity, inspection tools to detect and characterise corrosion (stress corrosion cracking and microbially induced corrosion) among others.

The oil & gas industry’s ever-increasing need for innovation will compel companies to invest in technology development, and the pace of innovation will differentiate companies from each other.