Headquartered in London, Lloyd's Register (LR) is a global engineering & technical services organisation whose solutions ensure that the clients' assets & businesses are safe, sustainable and dependable.

As oil prices continue to erode margins throughout the industry, the offshore sector tightens its focus on efficiency and cost reduction. But what are the long term implications; how can the sector secure its sustainable and viable future? According to the Lloyd's Register Energy Oil & Gas Technology Radar 2015-16, 'Operational efficiency' is the top driver for innovation investment. The survey which includes more than 450 professionals from across the global sector reveals a broad consensus that innovation is vital if the sector is to meet the challenges of today and tomorrow. But innovation is challenging, inherent with risk and usually costly.

Investment Priorities

Despite the complexity, the research finds that innovation has not halted, although it has slowed. According to the report, technology initiatives that are close to completion may be accelerated, while those with longer development periods or a lower probability of success are likely to be put on hold. Longer-term, disruptive innovations are most likely to be stalled for now, whilst technologies that offer short term impact are often prioritised. This includes enhanced oil recovery (EOR), unmanned aerial vehicles (UAVs) and standardisation of oil fields. Whilst this reflects the sharp cost reduction agenda throughout the sector, the need to find new sources is also recognised, with 'Improve access to potential reserves' also ranking highly.

But with 67 percent of those surveyed, identifying the challenges of deployment as a key barrier to innovation, it appears that development isn't the most significant blocker of innovation. According to the survey, most companies rate themselves as better than their peers at conceptualising and developing new technologies, but average or below average at deploying them. To a large extent, this reflects the commercial issues around risk and return; evidenced by the survey which ranks 'Uncertainty over returns' as the top deployment challenge. This has been compounded by falling and uncertain oil prices, as returns become ever more difficult to evaluate.