NEW YORK (TheStreet) -- With some oil exploration and production companies already suggesting they are rethinking capital expense plans for 2015 due to weaker prices, pressure for innovations to boost efficiency has never been stronger. Historically slow-moving in the adoption of new technology, companies in the sector are finding they can dramatically reduce costs by expanding on existing investments in robotics, sensors, virtual reality and software solutions.
Technology-laden investment ventures are already more commonplace in the E&P sector than in years past. ConocoPhillips (COP) launched its own Technology Ventures group and also established Energy Technology Ventures, a joint venture with General Electric (GE) and NRG Energy (NRG) . Chevron (CVX) has been active through Chevron Technology Ventures and Chevron Venture Capital. Statoil (STO) is using revenue from its global operations to seed and support commercially viable technologies to lower costs and boost performance through its Statoil Technology Invest (STI) division.
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Technology helped BP (BP) extract 20% more oil from its Prudhoe Bay field in Alaska using a combination of cutting edge tools. In 2012, the company deployed a new horizontal drilling technology on a JV project with Russian company TNK that shortened its drilling cycle by 210 days and saved $19.2 million. According to the company's Head of Technology, David Eyton, "BP is increasingly taking into account the long-term impact of technology on its portfolio choices. In 2013, we carried out a long-term technology view which indicates, for example, that the global potential of unconventional sources of energy is very significant and likely to become a growing part of the industry's focus."
BP is also working with DuPont (DD) and the Energy Biosciences Institute to study whether micro-organisms could actually help stuck oil to flow, a focus for Glori Energy (GLRI) . GLRI just announced an extended technology partnership with Statoil and praised how its low cost, low capital investment technology could "significantly" lower the average cost of barrels of oil produced.
Further investment opportunities abound for E&P operations. Maintenance-free fibre-optic sensing solutions can use acoustic sounds to better gauge flow quantification of oil and gas reservoirs. Real-time diagnostics, automation, 3-D imaging, flexible piping, temperature measuring sensors, optical object fingerprints for subsea sites, wireless reservoir surveillance and radar to measure spills can all make exploration and drilling much more efficient. Software and database solutions can help lower costs for complex projects and improve overall decision making.