Our research identifies economic opportunities in the energy transition. To do this, we have now drawn upon 20M patents. This 14-page note illustrates the six ways that patent analysis can give decision-makers an edge.
This database tabulates almost 300 venture investmentsmade by 9 of the leading Oil Majors, as the energy industry advances and transitions.
The largest portionof activity is now aimed at incubating New Energy technologies (c50% of the investments), as might be expected. Conversely, when we first created the data-file, in early-2019, the lion’s share of historical investments were in upstream technologies (c40% of the total). The investments are also highly digital (c40% of the total).
Four Oil Majors are incubating capabilitiesin new energies, as the energy system evolves. We are impressed by the opportunities they have accessed. Venturing is likely the right model to create most value in this fast-evolving space.
The full databaseshows which topic areas are most actively targeted by the Majors’ venturing, broken down across 25 sub-categories, including by company. We also chart which companies have gained stakes in the most interesting start-ups.
The database evaluates 950 technical papers that have been presented at shale industry conferences from 2018-2020. We have summarised each paper, categorized it by topic, by author, by basin, ‘how digital’ and ‘how economically impactful’ it is.
The aim is to provide an overview of shale R&D, including the cutting edge to improve future resource productivity. We estimate 2020 was the most productivity-enhancing set of technical papers of any year in the database.
Recent areas of innovationinclude completion design, fracturing fluids, EORand machine learning. We also break down the technical papers, company-by-company, to see which operators and service firms have an edge (chart below).
We have modelled the economics of CO2-EOR in shale, after interest in this topic spiked 2.3x YoY in the 2019 technical literature. Our deep-dive research into the topic is linked here.
The economics appear positive, with a 15% IRR under our base case assumptions, and very plausible upside to 25-30%.
There is potential to sequester 3.5bn tons of CO2 in shale formations in the US, plus another 40bn tons internationally, for a CO2 disposal fee of c$40/ton, which we have quantified based on the technical literature.
The model also allows you to stress-test your own assumptions such as: oil prices, gas prices, CO2 prices, CO2 tax-credits, compressor costs and productivity uplift. The impacts on IRR, NPV and FCF are visible.
Advanced reservoir modelling can stave off production declinesat complex offshore assets. This data-file illustrates how, tabulating production estimates based on a technical paper published by Eni, an industry leader in applying high-speed computing power in its upstream operations.
Specifically, the paper simulates an offshore field-cluster in a single, Integrated Asset Model that covers 31 wells, drilled into 3 reservoirs (each is modelled in detail, with a total of 1.9M reservoir cells), 34 pipes, 4 oil platforms and 3 delivery points. Each iteration of this model takes an average of 3.5-hours to run.
Production can be uplifted by 60% according to the simulation, both in terms of EUR and in terms of year 5-7 production rate. 9pp of the uplift is achieved by simple reservoir optimisation. Another 21pp of uplift is achieved by identifying the key bottleneck, and building a new separation & boosting platform to alleviate it. A further 29pp of uplift comes from optimising the development plan for the new platform.
Emerging digital technologies appear to be keeping LT oil-markets better supplied than many expect, with production upside for the industry’s technology-leaders.
There is only one way to decarbonise the energy system: leading companies must find economic opportunities in better technologies. No other route can source sufficient capital to re-shape such a vast industry that spends c$2trn per annum. We outline seven game-changing opportunities. Leading energy Majors are already pursuing them in their portfolios, patents and venturing. Others must follow suit.
This data-file quantifies the energy efficiency of fourteen different transportation types, in mpg, miles per kWh, passenger miles per kWh and CO2 intensity per passenger mile.
“Efficiency”is calculated using an apples-to-apples methodology, comparing real-world fuel consumption to equations of mechanics (i.e., stop-starts and air resistance, per Tab 3 in the model).
Electrification generally offers a c4x efficiency gain, jumping from c15-20% on conventional oil-powered vehicles to c60-80% on electric vehicles. Hybrids and hydrogen also yield modest efficiency improvements.
Most exciting is the set of emerging, electric transportation technologies, which are faster than incumbents, yet also achieve 4-120x efficiency gains per passenger mile (chart below).
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