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Lux Research report finds that new collaboration is needed to unlock the value of nanotech in oil and gas
Oil and gas exploration is increasingly fruitless: Since 1999, the world's five largest international oil companies have replaced only 82% of the reserves that they've consumed, and even Royal Dutch Shell CEO Jeroen van der Veer has said that "easily accessible supplies of oil and gas will no longer keep up with demand." Nanotechnology can help the oil and gas industry find new fields and extract more from existing ones - but only if new collaborations bridge the industry's historical divides, according to a new report from Lux Research entitled "Petroleum Players Seek Nanotech Solutions to Oil Supply Woes."
"Nanotechnology fits oil and gas industry needs," said Mark Bünger, Research Director at Lux Research. "Underground oil inhabits nanoscale pores; oil wells' extreme temperatures and pressures benefit from nanostructured materials and coatings; and engineered nanocatalysts can upgrade heavy oils to lighter, more valuable ones. With these benefits in store, it's no surprise that 78 nanotech start-ups focus on oil and gas - and that associations like the Society of Petroleum Engineers and the Advanced Energy Consortium are investigating everything from subsurface nanosensors to autonomous nanobots."
To examine the landscape of nanotechnology developments in oil and gas, Lux Research developed a global inventory of research initiatives, corporate R&D programs, and start-up companies in the field. The report concludes that:
Tiny oil and gas R&D budgets constrain large companies' nanotech development. International oil giants are spending just 0.2% to 0.5% of revenue on R&D - 50 to 100 times less than in other technology-dependent sectors like aerospace, biotech, and information technology.
Start-up companies are filling the gap. With oil prices exceeding $100/barrel, nanotech start-ups are prioritizing oil and gas applications over alternative uses of their materials. For example, Integran is developing nanoengineered coatings of tungsten carbide and boron nitride to harden drilling equipment and pipes, and Intrinsiq Materials is developing explosive perforators for burning holes through rock.
The oil and gas industry's fractured history keeps players from combining their efforts. Increasingly bitter rivalry keeps international oil companies like Shell and ExxonMobil (which have a history of deploying new technology) from collaborating on nanotech with national oil companies like Sinopec and Gazprom (who own the reserves but have not focused on technology in the past).
New collaborations are required to unlock nanotech's value in oil and gas. Four parties must come together to accomplish interdisciplinary nanotech research with benefits for the entire industry: international oil companies, national oil companies, start-ups, and academic institutions.
"According to Chevron, the average new technology in oil and gas exploration has taken 32 years to achieve 50% penetration," said Bünger. "In today's environment, that's an order of magnitude too long. To accelerate development, NOCs should engage in joint ventures with start-up companies and strategically acquire them as necessary; IOCs should set aside at least 1% of revenue for R&D; and start-ups should tap oil and gas riches to fund technologies with applicability in other additional fields - like the water market, which has similar needs in piping, drilling, and filtration."
"Petroleum Players Seek Nanotech Solutions to Oil Supply Woes" is part of the LR Nanomaterials Intelligence service. Clients receive: 1) State of the Market reports every six months; 2) ongoing technology scouting reports and proprietary data points in the weekly Lux Research Nanomaterials Journal; and 3) on-demand inquiry with Lux Research analysts. For information on how to become a client, contact John Schwartz at or (646) 649-9582.
About Lux Research, Inc.
Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance, and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections, and competitive advantage to our clients
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