Status and Future of

Petroleum Research

by Siri Helle Friedemann

Program coordinator ”Olje og gass”, RCN

shf@forskningsradet.no

FORCE seminar at NPDApril 8, 2002

Executive Board

The Research Council's system of governing bodies

Organisation and Finance

Public Relations and Information

Strategic Planning

Medicine and Health

Industry and Energy

Culture and Society

Environment and Development

Science and Technology

Director General

Bioproduction and ProcessingResearchBoard

ResearchBoard

ResearchBoard

ResearchBoard

ResearchBoard

ResearchBoard

Executive Board

Total budget by divisions, NOK mill. (2002)

180

732

362

271491

657

649

Industry and Energy

Bioproduction and Processing

Science and Technology

Culture and Society

Environment and Development

Medicine and Health

Total NOK 3 595 million (administration incl.)

misc.

adm.

Funding received from the ministries (2002)

Ministry of Trade and Industry

Ministry of Petroleum and energyMinistry of Fisheries

Ministry of Agriculture

Ministry of Environment

Ministry of Education, Research and Church Affairs

Miscellaneous ministries

Administration

Total NOK 3 595 million (administration incl.)

The Research

Fund

0

500

1000

1500

2000

2500

3000

3500

1993 1995 1997 1999 2001

Budget development (1993-2002)

1993-NOK

Mill. NOK

0

500

1000

1500

2000

2500

3000

3500

1993 1995 1997 1999 2001

Total budget by divisions (1993-2002)

Industry and Energy

Medicine and Health

Environment and Development

Science and Technology

StaffsMill. NOK

Culture and Society

Bioproduction and Processing

Objectives for Energy RD&D

• The overall objectives of energy RD&D are threefold:

• Contribute to security and diversity of energy supply.

• Promote economic growth and the competitiveness of industry

• Reduce the environmental impact of energy supply and use

Ref.:International Energy Agency

Objectives for Petroleum RD&D• Objectives for petroleum RD&D

specifically, can be extracted from the overall goals of energy RD&D:

• Optimum resource management• International competitiveness of

industry• High competence and knowledge• New industry development based on

oil and natural gas

Ref. ”Olje og gass” program

National Funding of oil- and gas research 2002

Ministries: Ministry of Petroleum and Energy, Ministry of Trade and Industry, Ministry of the Environment, Ministry of Education and Research, Ministry of Labour and Government Administration

The Research Council of Norway

Strategic and basic petroleum research

Basic fundingPetroforskSIP/SUP

69 MNOK

Social science research on petroleum related issues

Petropol

6 MNOK

Userdriven oil- and gas research

Olje- og gass

35 MNOK

Qualifying new technology trough pilot demon-strations

DEMO2000

20 MNOKHSE

in the petroleum sector

15 MNOK

Gas power with CO2 capture and

disposal50 MNOK

Effects of discharges to sea

2 MNOK

Instruments for Petroleum RD&Dmanaged by the RCN• Basic funding to the Institutes• Institute and University

Programmes• Programmes, both researcher- and

userdriven

• In addition there is allocated funding for independent projects (basic research) and infrastructure (advanced scientific equipment)

• Center of Excellence??

Center of Excellence in Petroleum relevant diciplines?• 40 applications for CoE• 4 applications are relevant for

upstream petroleum research:Integrated Petroleum Research (UiB)

Geohazards (NGI)Multiphase Systems (UiB)Physics of geological processes (UiO)

• In addition there is application for:Ships and Ocean Structures (NTNU)From Natural gas to Energy Products

(NTNU)Ocean Storage of CO2 (Nansen)

The innovation programme ”Olje og gass”

• New programme for userdriven petroleum R&D managed by Industry and Energy:

• The instruments are:Innovation projects (2/3 of the portfolio)Enabling strategic projects (1/3 of the

portfolio)

• The programme shall focus on thematic areas within the OG21 strategy and adress challenges on the NCS to secure competitiveness of the industry, economic growth and welfare.

Programboard ”Olje og gass”Programboard ”Olje og gass”Title Name Employed at

Vice President Ole Berg (chairman) ABB Offshore Systems

Vice President Ingve R. Theodorsen StatoilVice President Hans Jørgen Lindland FMC

Kongsberg Subsea

Vice President Ingebrigt Moum KværnerSen Advisor Per Erling Frivik SINTEF EnergiVice President Jørgen C. Arentz Rostrup Norsk Hydro

Technology NewVentures

Vice President Eva Halland NPDArea Manager Kristine Holm

TotalFinaElfSen ResearcherAina Margrethe Berg RF

The autorities are an important stakeholder due to their ownership of both resources and operating oil and gas companies

Governmental funded RD&D has been and is essetial to build the Norwegian petroleum sector, comprising oil- and gas producers, service- and supply enterprises and the institutes and universities.

Value is created by cooperation

Financing of user driven research and demonstration 1999/2001

OED/NHD/RCN 30%

Oil Companies42%

OED/RCN 25%

Oil Companies 48%

User driven researchand development

Demonstration

Industry 28% Industry 27%

Industry involvement: Oil comp anies : 11 Service and supply comp. : 60

SME < 100 employees : 22

Thematic Research Initiatives

• The Oil and Gas Programme is open for applications on thematic areas within the OG21 strategy, based on an overall portfolio analysis and OG21 priorities, the call for applications will state specifically which of the thematic areas that are open for applications.

• The call for applications within “enabling strategic projects” has been issued with deadline June 15. The call asks for applications within the thematic areas ”Increased recovery” and ”Exploration”.

• The call for innovation projects will be issued before the summer holidays with deadline September 15.

• Ref. is made to the website:

http://www.program.forskningsradet.no/olje-gass/

Userdriven petroleum R&D

0

50

100

150

200

250

300

1993

1994

1995

1996

1997

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2001

Inco

me

BN

OK

0,0

20,0

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100,0

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Fu

nd

ing

MN

OK Governmental income

from the petroleumsector

Governmental fundinguser-driven petroleumresearch

• The governmental funding for userdriven R&D within the petroleum sector has been steadily decreasing for many years,while the state income through direct ownership and taxes have increased drastically over the same period.

Future of Petroleum Research

What now?The RCN is host for the OG21 secretariat and take part in the OG21 strategy work.

RCN will use the OG21 strategy to further develop their instruments and thematic priorities for petroleum research.

RCN work together with OG21 in order to increase the governmental involvment and support for petroleum RD&D

OG21 has defined five important focus areas:

Environment Increased

recovery Deep waters Small

reservoirs Gas value

chain

Ekofisk Oil Production History

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

Time

STB

2/4 GT

2/4 X

2/4 K

2/4 C

2/4 B

2/4 A

Ekofisk Oil Production History

0

50000

100000

150000

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250000

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2/4 A

Kilde: Phillips

National Technology Strategy

Prioritised - thematic areas

Demo 2000

Demonstration Useroriented R&D Strategic kompetence /Education

Time0 - 4 0 - 10

Value added through:Increased RecoveryReduced CostEP - Export Potential

Governmental funding

Industry funding

National Technology Strategy

200

2700

2900

5000

4400

600

1 MNOK from the government releases 3-4 MNOK from the industry

Ensure Norwegian competence

Ensure value creation in Norway

Need for governmental funding to approach 600 MNOK the next 2-3 years

A national effort and cooperation to double the efforts and spendings related to petroleum research and technological development

OG21 Vision and Objectives

Vision

We want - World class

competencea leading global

industry

We want to be - the most productive

continental shelf

Vision

We want - World class

competencea leading global

industry

We want to be - the most productive

continental shelf

Main Objectives

Ensure most profitable and environmentaly friendly development of the resources of the Norwegian Continental Shelf

Strengthen the industry’s international competitivenes

Main Objectives

Ensure most profitable and environmentaly friendly development of the resources of the Norwegian Continental Shelf

Strengthen the industry’s international competitivenes

Thank you for listening.

Any questions?