Scientific conference – “Innovation Management in the Oil and Gas Industry,” Moscow

2013.10.28

On October 24-25th, Moscow held the first annual scientific conference,”Innovation Management in the Oil and Gas Industry.”

The conference was organized by the Academician I. M. Gubkin Scientific-Technical Society of the Oil and Gas Industry jointly with the Gubkin Russian State University of Oil and Gas, and received official support from the State Parlaments Energy Committee, as well as a number of professional unions and associations.

Attention was mainly paid to the following topics:

  • Modernization of the oil and gas industry and current problems of innovative development stimulation
  • Resource and innovation scenarios for fuel and energy companies in Russia
  • Strategic systems of innovation activities management for oil companies
  • Technological platforms and oil and gas clusters as tools for innovative development
  • Support mechanisms of innovative projects in the oil and gas sector
  • Innovative methods and technologies to increase oil production
Speaker V.G.Martynov

Speaker Mr. V.G.Martynov

Opening the conference, Chairman Mr. V.G. Martynov (Rector, Doctor of Economics, Professor of the Gubkin Russian State University of Oil and Gas, Chairman of the Academician I. M. Gubkin Scientific-Technical Society of the Oil and Gas Industry), pointed out that the oil and gas sector is a first (priority) sector, which provides effective demand for innovations. Its effectiveness is considerably higher than the effectiveness of all others sectors, he claims. “Very few people (even specialists) know that oil and gas industry is less than 2% of the working population of Russia. 2% who work in the oil and gas sector make up 50% of Russia’s GDP. Yet the rest of the 98% of the working population produce the remaining 50%. [..] If other sectors worked in the same way, perhaps our country would be a little different.”

Those unfamiliar with the oil and gas industry might be surprised by how often exploration and production operators ignore planning and collaboration, either because more pressing break-fix problems take precedence or because it just seems less interesting in an industry focused on exciting discoveries and new production. Sometimes, plans are made but not implemented because they don’t align with a company’s strategic and financial priorities.

Other companies are taking a more disciplined approach. They recognize that planning and forward thinking are vital steps towards industry excellence. Collaboration may not always be easy, but it’s essential to ensuring a safe, reliable, and sustainable future for all mankind.

In his report, “Modernization of Oil and Gas Industry and current issues of innovation development stimulation”, Mr. I.D. Grachev, Chairman of the State Parlament Energy Committee, proves that there is no progress without growth in energy consumption. “Nowadays, it is strictly clear – if you want progress, you will consume more energy”. He also points to the indispensability of the oil and gas industry in the world. “The second basic thing that had a lot of myths, particularly in Europe, is that sun and wind and some other renewables in the short historical perspective will displace gas and oil (that there is no need for them). It is obvious, for fundamental physical reasons, that this is absolutely impossible. Never, under any circumstances, will sun and wind produce low-cost electricity. [.. ] No inventors of perpetual motion machines will be able to make these solutions affordable (low-cost). Just recently, my colleagues from Germany shared with me that the biggest factory of solar panel production is on the verge of bankruptcy, and is being sold for only 1 euro!”

Poor planning can lead to some expensive mistakes: bankruptcies, foreclosures, labor overtimes, and missed deadlines. More importantly, rushed operations and activities can create unsafe conditions for workers. Removing the inefficiencies from operations and implementing innovative new technologies contribute to safe, reliable and cost-effective operations.

According to Mr. A.N. Dmitrievsky, Academician of the Russian Academy of Sciences, Director of the RAS Oil and Gas Institute, the oil and gas industry is the one that is most prepared for innovative development, and these innovations will provide the greatest effect on the development of the country’s economy.If we do not have time to create new technologies, we will face production decline. Innovations in the oil and gas sector are highly necessary.

Mr. Gerhard Markov, however, believes that while protecting such new innovations is needed, the Russian patent office is still experiencing some issues. A wide range of different, unlinked plans from different companies can create chaos.  One company may depend on software from a vendor, while another may employ a different operating system, while still a third company makes do with paper spreadsheets! How on Earth can they be expected to communicate?

Innovation often takes a back seat to more urgent matters, delaying schedules indefinitely. This can create a vicious cycle where even well-planned projects are constantly delayed, creating a seemingly endless queue of important but not necessarily“urgent” work. Investing extra resources to clear this jam is needed to stabilize the industry’s planning process.

Collaboration can reduce problems within the industry, but never eliminate them entirely. No one can predict the future, after all. The best companies plan for the unexpected, reserving time and resources for “rainy days.”

It was a pleasure speaking with Mr. Martynov personally after the conference. The creation of a working group for the company NRGLab was supported by Mr. Martynov. He will contribute his best specialist to the NRGLab team.

Remember – sometimes, a little experimentation is needed to figure out the right balance. Bringing industry leaders together to discuss ideas for the future helps promote collaboration. To stay informed about other business events happening duringthe international series of conferences“ Energy security of Russia,” please visit: http://www.oilconference.ru/#!indexeng/c18xg

Article is prepared by Ana Shell

All quotations are translated from Russian.

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