Statoil: the ideas factory

Innovation has always been an integral part of oil and gas exploration and production. From drilling the deepest, hottest wells to incremental recovery increases or cost reductions, the search for pioneering technologies and improved ways of working is constant. And no-one could doubt the commitment to innovation shown by Statoil.

Voted the world's seventh-most innovative company by Forbes in 2010, Statoil has won numerous plaudits for its technical advances throughout its 40-year history. Subsea is a particular speciality: in 2012, Statoil and Aker Solutions won the ONS Innovation Award for the Åsgard subsea gas-compression system.

"All the oil majors have some kind of innovation engagement programme, like Shell's GameChanger," says Ole Dokka, Statoil's manager for innovation engagement. "If anything is unique about our programme, it's our openness."

The Statoil Innovate web portal exemplifies this open approach. Initially launched in 2010, it invites absolutely anyone to contribute ideas that could help overcome the specific business challenges the company faces.

"When we set it up, it was to get some experience in how crowdsourcing could work for us, and it's still very much at the experimental stage," says Dokka, who took over responsibility for the website in late 2012. "We believe in open innovation: the need to be bigger than ourselves and to work with a lot of people."

But, although Statoil published 12 technology challenges on the site in the two years following its launch, the company saw little of substance in the responses. So when it established a new corporate innovation unit in the autumn of 2012, it also completely revamped the portal.

The company now shares stories about each challenge and its progress on a blog, which has also been revamped, with one of the main changes being that more detail is now offered on each business issue.

"We understood that we needed to give more to get more," explains Dokka. "We needed more substance, to go deeper into the problem and give more information about the context. We're already seeing some interesting results."

No time-wasters please

That sharp uptake in interest may also be due to another new tactic: making use of social media to broaden the portal's reach. In the short time since the website's relaunch in May 2013, the company's 'Innovate with Statoil' LinkedIn group has attracted almost 400 members.

The essence of Statoil Innovate's remit is to draw in expert problem-solvers from companies with relevant experience, rather than legions of tyre kickers. That's one reason it has not actively marketed the site using paid-for options like LinkedIn's InMail or banner ads, relying instead on social, print and web media to spread the word.

"Apart from some generic search engine marketing, we've not spent a single marketing dollar to reach them," says Dokka. "We want to let the group grow organically at the moment. The next release is planned to integrate more with Google+ and other social infrastructure. We may plan phased marketing support for the next challenge if we think it will help."

Though it has operations in 36 countries, Statoil is still little known outside Norway. The combination of the Innovate portal and social media has already attracted one valuable new UK supplier, while another existing supplier is republishing the latest challenge on its own website.

"We're striving to reach the relevant people and companies," says Dokka. "Lots of people are happy to discuss these things but we want to make them work together. Our first challenge is a very narrow technical one and something of a test ground, but it has a substantial upside if we can improve performance."

That challenge is to find ways to speed up pressure-vessel inspection. With around 2,500 offshore pressure vessels requiring inspection every three to seven years and an even greater number onshore, a 20% efficiency improvement translates into an immediate saving of $175 million, thanks to shorter production shutdowns and, with less human intervention, better health and safety performance. So far, the signs are positive.

"Our back-office team reported that the quality of the ideas submitted through the portal has improved considerably compared with earlier performance," says Dokka. "We already have five substantial ideas that have passed the first screening, and our specialists are really excited."

The portal may be central to engaging with external problem-solvers, but it is only one part of the infrastructure Statoil has constructed to support original ideas. Mediated by the research, development and innovation unit, workflow starts with the relevant business division giving a precise definition of project needs, followed by a careful articulation of the innovation required and the challenges involved.

"From there, we pick one or more channels to connect with the right people - and the portal is only one of those," says Dokka. As well as external suppliers, a combination of internal management teams, academic institutions and R&D staff may be involved in what Dokka describes as the "ideation process".

"We narrow down the possible options and look for an idea that can be rapidly tested and verified," he explains. "To keep costs low, we want to prototype as soon as possible and then we can make the decision whether to develop it further."

Ideas in practice

This is where the Statoil Technology Invest (STI) programme comes in, offering three kinds of investment aimed at suppliers with varying levels of maturity. The LOOP package provides project funding and gives SMEs access to technical expertise and pilots without taking ownership, while SEED funding and venture capital both involve STI taking a stake.

STI currently has a stake in 15 oil and gas suppliers as well as in businesses active in other sectors, such as Numascale and its scalable server-interconnection technology. It also works with the Oiltech Investment Network, most recently backing a seminar at Statoil's Forus facility in Stavanger, Norway, which saw 22 start-ups present their ideas to potential investors.

Over the years, STI and the overall innovation programme have produced many successful projects in conjunction with external partners in addition to those run internally. In one example, LOOP funding helped Solberg Scandinavian greatly accelerate the development of its fluoride-free firefighting foam, with the first successful full-scale test taking place on the North Sea's Kvitebjørn platform last December.

Seismic acquisition, processing and interpretation have been particular strengths, what with high-resolution 3D, the Stingray fibre-optic seafloor sensor system and the optimisation of controlled-source electromagnetic and magnetotelluric surveying.

Then there's the steerable-liner drilling system developed with Baker Hughes, supply chain software for complex oil and gas projects, ballast-water-cleaning technology, borehole-stability prediction - the list is almost endless.

Perhaps most impressive of all are Statoil's increasingly ambitious 'subsea factories', like the 1,240t Tordis separation and injection module or the first subsea facility for the injection of raw seawater, on Tyrihans. The world's largest operator at depths greater than 100m, the company believes seabed-located compact separation facilities like these will be the key to success in Arctic production or in deepwater areas like the Gulf of Mexico and Brazil.

The world's first subsea gas-compression module is at today's cutting edge. Subsea compression improves gas recovery and offers many advantages over a new platform or a floating facility, including reduced investment and operating costs, a smaller environmental footprint and safer operations.

Developed with Aker Solutions, this will go on stream in the Åsgard field offshore Norway in 2015. Just fitting into a football field, the huge module will boost falling gas pressures from the Midgard and Mikkel satellite reservoirs, allowing stable production to continue and helping to recover an additional 280MMboe.

Statoil's ongoing success proves the wisdom of nurturing new technology. With another ten projects waiting in line to be publicised on the website, the company's search for innovative ideas and partners continues.