What's next For Innovation in the Offshore Sector? Date:   Thursday , June 30, 2016 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. Could Collaboration Drive Innovation In Oil & Gas? The Technology Radar research suggests that many in the sector recognise the gains that can be made by partnership with third parties. According to the survey, of the organisations who consider themselves to be \'enthusiastic\' collaborators, 29 percent say they are more successful at meeting their innovation goals compared with 10 percent of \'selective\', 10 percent of \'cautious\' and 16 percent of \'reluctant\' collaborators. The implications are clear: collaboration is linked to successful innovation. However, collaboration is itself fraught with risk. Collaborators share risk and resources, but they also share intellectual property, competitive advantage and crucially, returns. For these reasons, the collaboration remains the exception rather than the rule throughout the sector, although there are recent examples that suggest this may be changing. Looking Beyond Oil & Gas With new models of collaboration that are successfully facilitating technological development elsewhere, there is almost limitless potential for adapting new technologies from other industries. Examples include imaging technologies, advanced lightweight and corrosion-resistant materials, remote inspection, nanotechnologies, data mapping, advanced data analytics, cardiovascular-type pump technologies, additive manufacturing, underwater autonomous vehicles, sensors, super insulation and carbon fibre. Traditionally, aerospace is considered to be a rich potential source of new technologies because like the oil and gas sector, it is highly regulated, mission critical and relies on materials that can withstand extreme climatic conditions and pressures. Upstream companies are already looking into the composite materials developed by the aerospace industry because they are light, durable and corrosion resistant, including the sensors for data transmission. But this is just the beginning, and many other industries like Biomedical, ICT/gaming and automotive offer similar potential. The Future Is Digital Although the offshore sector has become increasingly digitised in recent years, other industries such as retail are well ahead in this area. The survey reflects an acceptance that this needs to change; 61 percent agree that their ability to collect and analyse data will be critical to performance in the short term, but only 44 percent rate their company as excellent or very good at collecting data. Still fewer rate their company as excellent or very good at analysing data. The survey also identifies the key issues such as the lack of data integration across the business and the company\'s ability to collect data with sufficient relevance/reliability. In some regions, this is partly down to the age of existing offshore infrastructure, which dates from a time when platforms were not built to accommodate wireless instruments. Talent is also an issue as companies cannot effectively introduce or extract value from new data technologies without access to specific and niche data skills. Ultimately though, any company wishing to remain competitive will need to successfully tackle these challenges. David Eyton, a contributor to the report, is optimistic; \"Data integration issues can often be overcome because analytics companies are often format-agnostic. Once we make our data accessible to the data analysts, they will use what we\'ve got and see what they can do with it,\" he says. What\'s Next For Offshore? The offshore sector is realigning in response to the low oil price environment and other challenging dynamics. In this environment, staying afloat requires new types of inventiveness and open mindedness; an eager and proactive search for novel technologies, approaches and ways of working.